Meeting President Obama
I had one of the most interesting days of my life on Wednesday: I flew to Washington DC at 6am, shook President Obama's hand and chatted briefly with him about education reform, stood behind him at a press conference, was interviewed on national TV three times, published an op ed in theWashington Post and, in a particularly surreal exclamation point at the end of the day, yukked it up with the Hermanator – all on less than 24 hours' notice. If you have a minute, pull up a chair and let me tell you the story…
On Wednesday morning, President Obama hosted a press conference to call on Congress to pass the Buffett Rule, a proposal inspired by Warren Buffett that would require anybody (like me) whose income exceeds $1 million a year to pay a minimum federal tax rate of 30%. You may recall that Buffett's secretary was in the audience during Obama's State of the Union speech in January, highlighting the absurdity that one of the world's richest people pays a much lower tax rate than his secretary.
To make the same point at yesterday's press conference, the White House asked members of a group I'm part of called the Patriotic Millionaires to participate in the press conference, and about 30 of us were able to make it down on short notice. Four of us with our assistants provided the backdrop, as you can see in this picture:
(That's me in the back left and Kelli next to me with the flag behind her; the other three Patriotic Millionaires on stage were filmmaker Abigail Disney (Pray the Devil Back to Hell), former Google engineer Frank Jernigan, and real estate investor Lawrence Benenson; to see the video and transcript from the press conference, seewww.whitehouse.gov/photos-and-video/video/2012/04/11/president-obama-speaks-buffett-rule, and for more background on the Buffett Rule, see the document I posted at: http://bit.ly/IRTe6P, which also includes this email in case you want to link to it.)
Just before the press conference started, he stopped by the nearby room where we were all waiting and shook hands with everyone. When it was my turn, I said, "Hi Mr. President, I'm Whitney Tilson of Democrats for Education Reform. We were early supporters of yours, and I just want to thank you and [Secretary of Education] Arne Duncan for the incredible work you're doing."
His eyes lit up and he said (as best I can recall), "I remember your early support. We're making progress, but we still have a lot of work to do."
I said, "We'll keep fighting for you," and then he was hustled out of the room to start the press conference.
My Washington Post Op Ed
In going public with my views on such a controversial topic, I knew that I was going to catch a lot of flak, so I wanted to write down my thoughts in an email that I could send to anybody who contacted me. My hope was that people who disagreed with me might say, "Well, I'm certainly not convinced, but I respect the fact that you make a calm, rational argument – a rare thing in today's poisonous atmosphere."
As I kept writing and writing on Tuesday afternoon, the idea occurred to me that this might make a good op ed in the Washington Post, so I contacted a friend there. He liked it and, to make a long story short, my column ran on the Post's web site just as the press conference was getting under way Wednesday morning. Obama pushing for the Buffett Rule was a big news story, so my column generated lots of hits and comments (775 at last count) – so many, in fact, that the Post ran it in the paper yesterday. Here's the beginning and the full text is included at the end of this email:
This morning I was at the White House supporting President Obama in his call for Congress to pass the "Buffett rule." The rule — inspired in part by Warren Buffett's exasperation in learning that his assistant was paying a greater percentage of her income in taxes than he was — would require anyone whose income exceeds $1 million a year to pay a minimum 30 percent in taxes. It would hit me hard. I haven't finished my taxes for 2011, but in 2010, my federal tax rate was 21.4 percent; if the Buffett rule had been in effect, my federal tax bill would have been 40 percent higher. Some years, my taxes would likely be more than 50 percent higher.
Why am I okay with this? The answer has to do with simple math and basic fairness…
Why I Did It
So why'd I do it, especially when the Buffett Rule – and me supporting it so publicly – is directly contrary to my self-interest? There are a lot of reasons, but it really just boiled down to: it's an obviously good idea whose time has come, and I felt that publicly saying so was the right thing to do.
I don't like the idea of my taxes going up any more than the next guy, of course, but there are certain basic things that make this country a better place to live than other countries and those things need to be paid for. In addition, I believe that our federal budget deficit has reached dangerous levels ($1.3 trillion this fiscal year, with spending of $3.796 trillion 54% higher than receipts of $2.469 trillion). Other than improving our public schools, I think getting our deficit under control is the most important long-term challenge facing this country.
Spending cuts alone aren't going to do it. Every well-informed person capable of doing basic math, if they were being honest (I realize that these three criteria exclude most of Congress), recognizes that the solution is a grand bargain along the lines of Simpson-Bowles that both cuts spending and raises taxes – say, $2-$3 of cuts for every $1 of tax increases. Make no mistake: this is going to be painful and most Americans will have to make sacrifices, with tens of millions of people getting smaller entitlement benefits, for example, and tens of millions of people paying higher taxes.
But somebody has to go first – raise his hand and say, "I'm willing to do my fair share – in fact, more than my fair share – to help rein in our deficits and put this country on a more sustainable path." It's not class warfare to say that people like me – who aren't suffering at all in these tough economic times, who are in many cases doing the best we've ever done, and who can easily afford to pay more in taxes with no impact whatsoever on our lifestyles – should be the first to step up.
My Assistant and I Compare Our Tax Returns
In preparation for Wednesday, Kelli and I compared our 2010 federal tax returns (I haven't finished my 2011 one yet) and we discovered two things:
1) My adjusted gross income was 39x hers – not 39%, but 39 times higher; and
2) My federal tax rate was 24.6% and hers was 33.4%, so hers was 36% higher than mine despite the fact that she made an order of magnitude less than I did.
We were both shocked. How can it be that I made 39x what she did, yet she paid a much higher tax rate??? It struck both of us as so obviously unfair.
Nor are we alone. Most famously, Mitt Romney paid a mere 13.9% in federal taxes on $21.6 million of income in 2010. Or consider the 400 Americans with the highest adjusted gross income. Not only have they been doing astonishingly well in recent decades (their average taxable income soared more than five times from 1992-2008, from $42.2 million to $227.4 million), but their tax rate also fell dramatically over this period, from 26.4% to 18.1%. A third of them paid less than 15% in 2008. (Here's the data:www.irs.gov/pub/irs-soi/08intop400.pdf.)
This is madness. Every single one of these people – and many more not-as-wealthy-but-still-doing-well folks like me – could easily afford to pay 30% without any impact on their lifestyles.
TV Interviews
Kelli and I did two interviews on Wednesday at the White House with CNBC and ABC World News With Diane Sawyer and, after I flew back to NYC, I was a guest on CNBC's Kudlow Report. Here are the links:
Meeting Herman Cain
Last but not least, things went from wild to surreal Wednesday when I showed up at the CNBC studios for the Kudlow Report and who should be in the green room but Herman 'the Hermanator' Cain! While I don't think he's Presidential material (to say the least), he's a really funny and easygoing guy so we chatted up a storm. Here's a funny thought: I think I might be the only person to ever shake his hand and Obama's on the same day! Here is a picture of us:
Below are five of my pictures from Wednesday, followed by my answers to 14 questions I've received, including: isn't this just a political carnival around a gimmick; why don't I just shut up and write a check; isn't this just class warfare; and what did you and Kelli say to the President?
Whitney
PS—I've discovered that a lot of people want to debate these issues. If so, I ask that you first carefully read my column in the Post and the Q&A section (both below), and please forgive me if I'm too swamped to reply personally.
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My Photos
This is the room in the Executive Office Building where the press conference took place.
Maybe 30 of us – all Patriotic Millionaires for Fiscal Strength – waited in a nearby room for President Obama to stop by before the press conference.
He shook hands and chatted briefly with each of us.
After the press conference, Kelli and I were interviewed by the White House press team.
Kelli and I about to go in a side door of the White House.
posted by Whitney Tilson at 5:22 PM
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