GEICO, the second-largest vehicle insurance underwriter in the US, has decided it will no longer cover Tesla Cybertrucks. The company is terminating current Cybertruck policies and says the truck “doesn’t meet our underwriting guidelines.”
I haven’t watched the YouTube video (I generally distrust what Reich says), but here’s what I see from the other sources:
currentafairs
Mentions Buffett once, and only when mentioning the pledge to Gates’ foundation. The article seems to mostly be about the Gates’ foundation taking credit for things they didn’t do. I’ll certainly read through the rest of the article, but it definitely seems to be a criticism of that org, not Warren Buffett.
inequality
Talks about The Giving Pledge (created by Buffett) and how those who have pledged aren’t donating their money fast enough (i.e. their money is growing faster than their donations). I don’t really see this as an issue, since the problem should correct itself when they die.
The article also complains about most donations going to foundations or DAFs, but honestly, when you need to move that much money, that’s probably the most efficient way to do it. So I guess I don’t understand the criticism.
apnews
This one is about wealthy people avoiding taxes generally. I don’t know how this applies to Warren Buffett, whose wealth is in the US and AFAIK isn’t being hidden in tax shelters like offshore banks or trusts. His tax bill is relatively low (this article claims 0.1% from 2014 to 2018), but I think that’s countered by his statements about increasing taxes on the rich (he is registered Democrat, if that matters to you at all).
So I don’t think the issue here has anything to do with Buffett himself, the issue is the tax law doesn’t account for unrealized gains. Or in other words, don’t blame the player, blame the game. The closest Buffett gets to tax shelters is his stock donations to his kids’ foundations, but my understanding is that those are charitable orgs, so I don’t see a ton of difference there vs donating to other orgs like the Bill and Melinda Gates Foundation, which he has donated way more to vs his kids’ orgs.
My personal view here is that any compensation above some amount (say, $400k) regardless of source should be taxed at the current rates, and those assets stepped up in basis appropriately. I don’t like Harris’ proposal though because it’s based on wealth instead of income, but I think Buffet himself would approve a change here. If we handled it that way, the income from stock grants and whatnot for extremely highly compensated employees (like a CEO) would end up being taxed as income (short term gains), and therefore would be functionally equivalent to a cash salary, which is what it’s intending to be.
If you’re not being purposefully obtuse I’ll save you the time from what the argument is. Wealth of his magnitude is a detriment to society, doesn’t matter if he’s saint Joseph or the pope. You’re saying “he’s the best kind”, deflecting from all of them being bad. If you don’t see that, then it’s fine. Just an economical opinion on where to go with society from the stalemate we seem to be in regarding workers and compensation.
I do feel like you’re being blind about the nepotism definitions though, you don’t need 200 billion from a family slush fund to qualify. The very act of what their parent’s profession is changes networking and exposure opportunities. Doesn’t matter if Daddy has ethical values, the name recognition and reputation you’re proclaiming gives an advantage.
I see two arguments here:
- Billionaires existing is a symptom of a larger problem
- Someone having a better start than you makes them a “nepo baby”
For the first, I and Warren Buffett somewhat agree, and I’ll quote him here:
“I continue to believe that the tax code should be changed substantially,” wrote Buffett. “I hope that the earned-income tax credit is increased substantially and additionally believe that huge dynastic wealth is not desirable for our society.”
“Perhaps annual payout requirements should be increased for foundations,” he added. “Some time ago, I testified before Senator Baucus in favor of increasing and tightening estate taxes.”
…
“I believe the money will be of more use to society if disbursed philanthropically than if it is used to slightly reduce an ever-increasing U.S. debt,” wrote Buffett.
That said, I likely disagree with his specific solutions, though I haven’t bothered researching to figure out what those are, because he’s clearly not particularly interested in crafting policy.
For the second, I largely hold to this definition of nepotism:
favoritism (as in appointment to a job) based on kinship
Someone giving their kids the best education they can isn’t nepotism, that’s normal parenting.
Someone giving their child an job they’re not qualified for absolutely is. If you want to see examples of that, look no further than Trump and his kids.
When I look at the top billionaires, most of them are largely self-made. For example:
- Elon Musk - dropped out of college and co-founded zip2, largely with money from investors
- Bill Gates - dropped out of college and founded Microsoft, which was pretty much bootstrapped
- Jeff Bezos - graduated from college, worked his way up in his career, then started Amazon when the internet was getting big (parents did invest $300k)
I don’t really consider any of them to be “nepo babies” because their parents didn’t give them an undeserved job or anything like that. And honestly, none of their parents were particularly rich, except maybe Musks. Each of them had incredible luck and capitalized on the early days of consumer computing, but that doesn’t cheapen the work they put in.
Do they deserve hundreds of billions? Probably not. But I don’t think they really benefited from nepotism like Trump’s kids, Kim Kardashian, and others did. There’s a huge difference between someone who had a good start and builds something great through their hard work and someone who is handed a pile of cash or a prominent position and rides that.
If you show evidence that their success is largely dependent on their parents, I’ll believe you. But if they largely built their wealth themselves, that’s a harder sell. I think each of those I mentioned earned their wealth, I just think our tax system dramatically increases wealth accumulation past a certain amount, and that’s what needs to be changed here.
