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Koch Responds To Buffet: ‘My Business And Non-Profit Investments Are Much More Beneficial To Society’
Think Progress / News Analysis
Published: Sunday 21 August 2011
“Charles Koch, head of the massive petrochemical, manufacturing, and commodity speculating Koch Industries corporation, has responded to Warren’s call for shared sacrifice: ‘No Thanks.’”
America’s current tax system forces people making $50,000 a year to pay a higher rate than hedge fund managers making $2.4 million an hour. Warren Buffett penned an op-ed last week declaring that America’s super-rich have been “coddled long enough by a billionaire-friendly Congress.” Lamenting the numerous tax loopholes and special breaks afforded to billionaire investors, Buffett noted that in his entire career, even when capital gains rates were as high as 39.9 percent, he never saw anyone “shy away from a sensible investment because of the tax rate on the potential gain.”
Charles Koch, head of the massive petrochemical, manufacturing, and commodity speculating Koch Industries corporation, has responded to Warren’s call for shared sacrifice: “No Thanks.” In a statement to right-wing media, Koch states:
“Much of what the government spends money on does more harm than good; this is particularly true over the past several years with the massive uncontrolled increase in government spending. I believe my business and non-profit investments are much more beneficial to societal well-being than sending more money to Washington.”
Koch’s “non-profit investments” include the group founded by his brother David, “Americans for Prosperity” (formerly known as Citizens for a Sound Economy). As ThinkProgress first reported, AFP was one the first and most well-resourced drivers of the anti-Obama so-called “Tea Party” movement. Koch-funded Tea Party events have featured speakers comparing health reform to the Holocaust, and in some cases have sponsored rallies with leaders of the “birther” conspiracy theory.
Among the Koch brothers’ other non-profit investments include far-right conservative think tanks dedicated to cheerleading the war in Iraq, spreading anti-science propaganda, and smears claiming that the poor do not really suffer. Koch has given money to educational initiatives, but in exchange for control over academic freedom that simply furthered Koch’s political beliefs. These “investments” at best advance Koch’s political ideology and at worst misinform American voters. Either way, they are hardly a replacement for “government spend[ing]” on things like food assistance and basic medical service.
According to Forbes, the Koch brothers have seen their wealth rise $11 billion in recent years, making the Koch brother among the richest in the country by being worth around $22.5 billion each. Much of those profits, however, are due to soaring gas prices and the fact Koch Industries has avoided compensating the public for hundred million tons of carbon pollution the company produces each year. Other Koch companies also receive significant taxpayer subsidies, despite Koch’s supposed opposition to government spending. This company is among the country’s top sources of carcinogenic chemicals and air pollutants.
America has been good to Charles Koch, providing an environment where his family has made billions. But Koch doesn’t want to give back, especially through more taxation. His charitable foundation, which gives largely to right-wing organizations that support his politics and Koch Industries’ business interests, still only donates about $12 million a year — 0.05 percent of Koch’s net worth. If higher rates were imposed on the super-rich, would Koch retreat to the family’s fabulous mansions, like this one in the Hamptons, aboard its fleet of private jets in a John Galt-inspired temper tantrum? Or would they act like any respectable businessman, and continue to make a profit without complaining?
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ABOUT Lee Fang
Lee Fang is an investigative researcher and contributing author for NationofChange. A resident of Sacramento, CA, Lee has written for the Boston Globe, The Nation, and ThinkProgress.org.
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37 comments on "Koch Responds To Buffet: ‘My Business And Non-Profit Investments Are Much More Beneficial To Society’"
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A ralely good answer, full of rationality!
August 22, 2011 6:12pm
I'd hate to see more than .05 percent of the Koch fortune give to the right-wing "think tanks" - the damage is enough as it is. I read an interesting article at the Commonweal Institute (http://www.commonwealinstitute.org/archive/the-powell-memo-and-the-teach...)(teaching-machines-of-right-wing-extremists ) [what's with this commenting system??]that reads, in part:
"In 1973, in response to the Powell Memo, Joseph Coors and Christian-right leader Paul Weyrich founded the Heritage Foundation. Coors told Lee Edwards, historian of the Heritage Foundation, that the Powell Memo persuaded him that American business was "ignoring a crisis." In response, Coors decided to help provide the seed funding for the creation of what was to become the Heritage Foundation, giving $250,000. Subsequently, the Olin Foundation, under the direction of its president, former Treasury Secretary William Simon (author of the influential 1979 book "A Time for Truth"), began funding similar organizations in concert with "the Four Sisters" - Richard Mellon Scaife's various foundations, the Lynde and Harry Bradley Foundation, the Olin Foundation and the Smith Richardson Foundation - along with Coors's foundations, foundations associated with the Koch oil family, and a group of large corporations[9].
How many people have read the Powell Memo from 1971? Fascinating reading. I'm trying to get The Crisis of Democracy by Crozier, Huntington, and Watanuki via inter-library loan.
August 22, 2011 12:49pm
I like the boycott idea. What search terms did you use to identify all the Koch Bros. interests?
August 22, 2011 6:33am
Let them eat cake? Guillotine!
August 22, 2011 12:56am
Tanton is of course quite full of himself and full of bull, too. He starts off whining about class warfare and name calling and then proceeds to immediately start name calling. Typical idiotic argumentative style of right-wing nutbags. Oooh, sorry I called you a name. BTW, there IS class warfare, that is what the Kochs' practice on the poor.
The 'global economy' is still mostly the U.S. Tariffs on imported goods would even the playing field for the cheap labor countries exporting their garbage to the U.S. They worked well until the idiot Reagan and his successors dismantled them.
As for the Kochs and others of their slimy ilk taking their money and leaving, well good riddance to them and their lucre. When they come back to the U.S. for more than 30 days/per year they can have their WORLDWIDE income taxed as income just like ordinary Americans have theirs' taxed.
This B.S. "wealthfare' to the Kochs via subsidies and tax advantages along with the corporatist wars they support/start are what is bankrupting the U.S., not some made up poor people on the dole.
Despitie Tanton and the multitude of right-wing nutbags repetition, lower taxes has NOT EVER worked to improve the economy, except for a very short term to a very few elites. The disgusting George Bush Jr. tax cuts prove that. Compare that to the 1990s Democratic tax increase (for which not one [re]publican voted) which led to a surplus delivered to the disgusting George Bush Jr. The same disgusting George Bush Jr. passed his tax cuts and since the U.S. economy has blown.
Tanton is likely just a paid shill (my opinion) who likely as not does not even believe his own words. If he does believe them then that is even sadder. Cynicism I can understand, madness is hard to understand.
August 22, 2011 6:27pm
Mr Tanton, please; save the crap. You sound well educated enough; and perhaps even well read enough to know that most of the groups and organizations funded by David and Charles Koch, espouse pseudo science and disseminate a confusing mix of lies and demagoguery.The two brothers fund movements that are anti-gay, anti-union, anti-climate change, and anti-tax. As financial bullies, they skew the democratic process by withholding the real truths that informed voters require in order to make suitable choices at the ballot box.Their father was intrumental in assisting Stalin to build fifteen oil refinineries in Russia during the late 1920's and early 1930's. I feel certain that such an experience would emotionally scar a young Fred Koch, veiwing Stalin's purges from a position of perceived abetment. The resulting power struggles between his four sons after his death, narrowed the ownership to possibly the most ruthless two. Reading a few paraphrased comments made by Charles and David over the years, suggests to me, that there may be symptoms of psychopathy in both of them. Such a diagnosis is not unknown amongst those with unchecked greed and ambition.But I do go on, Mr. Tanton. However, your comments caused my B.S. detector to alarm. I think you are attempting to obfuscate the obvious; and I believe that your lack of forthrightness does this discusssion and your country immeasurable harm.
August 21, 2011 9:33pm
>>These pathologies can be traced back to the real problem...which is that our economic system is like heroin. We can't quit our consumption, we can't fail to grow or we risk dying from the effects of withdrawal. And along the way, we consume everything on the face of the planet and process it not only into useful things but 300 kinds of toothpicks and toothbrushes that all end up in landfills or burning in incinerators. And every year, we perpetuate a bigger and bigger habit, all the while razing and poisoning the only world we'll ever have to live upon. <<
Ah, finally somebody talking sense and getting down to the essence of the problem. Honestly, I agree with everything said herein. But I might add that if you follow the logic of this argument, namely that our economy is sick at its base, then a Keynesian approach is far too simplistic. After all, it merely seeks to 'rekindle' economic growth. If that growth is a cancer, a 'habit' like heroin, reinvigorating it only digs the hole deeper when environmental and health consequences are factored in. We hear a lot of talk about sustainability; what capitalists and so-called free marketers have not come to grips with is that sustainability is not an option - - it is the future of our economy. We need to move from a consumptive model to a sustainable one. This might even require (sacre bleu!) stabilizing population growth - - because underlying the concept of 'growth' as it is now calculated is the ever-present need for more consumption, and the easiest route to this end is to stuff ever more people on to the face of the planet.The entire economic model is broken and is veering off the tracks. The reason that record stimulus has failed to 'reignite' the economy is because it is misguided. The money needs to be spent in establishing practices and businesses that embrace sustainability. The Koch brothers are engaged in exactly the opposite, and think they can propagandize the rest of us into seeing things their way. Sadly their path leads only to a burned out ashpit of a country, regardless of how much money it lines their pockets with.
August 21, 2011 6:13pm
To Steve Tanton,Nothing personal but go to hell. You are a soley owned toady of the KB's. You lie and people die.
August 21, 2011 5:28pm
Typicalk that the coporations that benefit form our illegal wars also do not wish to pay for them prefering the common people fight and pay fo the wars too. Typical to assume they deserve thje infrastructure of society for free and for subsideies even yet their welath would not exist withouta society to funtion within. The wealth they accumulat is overly excessive to begin with let alone get away with paying taxes commensuraqte with the beneft they reap off of the soicity italef. They are fixated on short term profit since when society collpase the money they do have will not be worth a thing.
August 21, 2011 4:59pm
B-O-Y-C-O-T-T
August 21, 2011 4:38pm
you can have all the money in the worldbut their bones will turn to dust like everyone else
August 21, 2011 3:33pm
How did the economy grow so much better when tax rates were higher? How can bankrupting the most powerful country in the world be a good thing? Why are you so afraid of poor people? We could eat the rich. But then we would have so much stuff without owners, people would quit working and become squatters.lower tax rates have always slowed the economy and rewarded stingy jerks instead of Patriots.
August 21, 2011 2:58pm
Koch brothers are in bed with Wisconsin's gov. Walker. The Koch brothers products need to be boycotted and Walker needs to be re-called. PS I'm glad they don't own any breweries...
August 21, 2011 2:54pm
Mr Tanton wow such a load of crap. trickle down economics has never worked. the author of it under Reagen, Stockton has even come out and said so himself .reward the company's who bring jobs back with tax incentives and tax the corporations who leave the jobs and money overseas as a CPA all you need to do is look at their profit and loss statements , if their outsourcing tax deductions are greater than their salary and wage lines here in the USA, than they are subject to a surcharge.
August 21, 2011 2:32pm
I appreciate your analysis, Joe, and agree.
August 21, 2011 2:21pm
The Koch brothers are enemies of Americans, out for nothing more than to destroy the American way of life. Their moral compass is run by greed and an apparent desire to make working people and democracy suffer.
August 21, 2011 2:20pm
Democratic "taxing and spending," I believe you are referring to Keynesian economics? They successfully dragged this nation out of the Great Depression. I know this might be an inconvenient truth but it is truth, nonetheless.
Capitalism was a superlative system at first, back when we had a primitive system of goods, production, and no real manufacturing. Back when we had less than a billion people living on the planet. Back when petrochemicals had really just started being exploited for their utility. Now we burn through them in order to make more goods, to entice the people to consume, in order to make grow our earnings every year, so that both the top earners and the bottom feeders can, presumably, live better lives. But we are realizing a true disparity of conditions between what the top half a percent have and what the rest of us earn (at least in this nation). In the U.S. we choose between making mortgage payments or paying for our medical bills. Privatization is not the answer for everything, especially for any system where the health of people should be the priority and not a profit margin.
The market does not sort everything out. If it did, 2008 and its aftermath would have been very different. If the market truly corrected imbalances and let only the strongest most profitable entities rise to the top, we wouldn't have bailed so many out. We are told capitalism produces the best competitive forces in the world because it naturally forces efficiencies and superiority of goods. That the people truly choose who sinks or swims. But it's a lie. Those TARP funds are living proof. Pull yourselves up by your own bootstraps is only an insult we use to throw at the poor...and we do. When the ruin of top banks in the nation are pinned not on their management but on the people who took out mortgages they couldn't afford, we know this is true. How obscene. Back in my day, banks didn't go out and offer to give money away without credit checks, a steep deposit, a steady work history, and assets that could be seized in case of default. What changed? Greed. These people had no business LOANING out money in the first place - really, does that sound like a true capitalist's actions? To give out money to flight risks? No, that is the work of sociopaths at the top, working feverishly to bundle up toxic assets into a few good ones and then drooling over the high interest. That is an inane law of averages that speculates on a probability curve. The best part is that it's all predicated on fiction.
These pathologies can be traced back to the real problem...which is that our economic system is like heroin. We can't quit our consumption, we can't fail to grow or we risk dying from the effects of withdrawal. And along the way, we consume everything on the face of the planet and process it not only into useful things but 300 kinds of toothpicks and toothbrushes that all end up in landfills or burning in incinerators. And every year, we perpetuate a bigger and bigger habit, all the while razing and poisoning the only world we'll ever have to live upon. Really, we are not talking about name calling here, we're talking about calling people out on the B.S. they pull. I know exactly what I see and I'm calling it out for what it is.
August 21, 2011 1:38pm
Does anyone ever reply to the ARTICLE?
FYI - Mr. Tanton, you are taunting the taunters!
Regarding the article, the key issue is how one computes the real value of a contribution. Calculated against the damage clearly caused by Koch industrial interests, the amount contributed is just as clearly in question. Are we to allow any business to do any damage anywhere in the interest of greed? And then call it good? I don't see how a rational person can recommend this.
As for Charles Koch's specious claim that he contributes more than Warren Buffett, his total contributions are puny and impotent compared to the value of Buffett's and Gates' contributions to world health, disease control and lives saved.
The Kochs, like the Murdochs are dinosaurs.
Rupert even now drowns in his own toxic ink.
Can Kochs long survive in the black goo that has enriched them?
Fox will not report, but flee as craven scoundrels,
Run out of town on a rail, tarred and feathered.
August 21, 2011 1:24pm
I know this sounds simplistic but I worked for many greedy companies in my career and only in the last 20 years has it gotten to a point where the greediest are not willing to share the wealth that they've accumulated. Sure greed has been around for many years but not this bad in america as it's become. Please tell me as a wealthy man how much more happiness does 5 millinon make you over 2 million?? Think about it and be honest.
August 21, 2011 1:07pm
First off, the first three comments are pure class-warfare jabs brought about by jealousy, insecurity and ignorance of economics. Name-calling is always fun I suppose, but it is a sign of intellectual deficiencies.
While I have absolutely no problem with looking into special "loopholes" in the tax code provided by Congress, it is worth noting that not all loopholes are for friends to avoid taxes. Some are created by Congress to put American business interests on even-footing with their competitors who may have state assistance or unfair advantages due to uneven government regulation or currency rates, etc. American business after all provides jobs and products or services vital to our domestic economy and sometimes is directly related to national security. If indeed there are found to be "special deals" which do not pass this litmus test, of course get rid of them. I'm sure there's hanky-panky going on in Congress, so why then do we call them Honorable?
That being said, in today's global economy, being competitive is tantamount to keeping money invested in America and jobs alive and growing in our economy. To date, the U.S. has been one of the weakest economies to invest in due to tax rates and over-regulation. Time for a change?
Higher rates imposed on the super rich of course sounds good at first bite, but the super rich will simply move their money elsewhere for a better return if uncompetitive rates are imposed. Even if we allow for another October 1917 and simply confiscate all of the wealth of the super rich, the impact will soon be miniscule. With the continuing fiscal irresponsibility of the American Congress, led by the tax and spend philosophy of the Democrat Party and the poor choices of investments made by the so-called socialists (which are always led by special-interest elites, never by "the people") we simply will create another Weimar Republic. The free market system always makes the best choices of investment and low tax rates always stimulate investment and growth, provided there's any capital left.
Now, the Koch's money will not go with them and must always be invested in something - better that they help the U.S. economy instead of move elsewhere. And as for the "right-wing" bating of emotional liberal readers, does anyone think for a moment that wealthy leftists do not put money into causes that support their political believes? George Soros anyone? Charities and non-profits should stand on their own merits and certainly may be investigated for fraud, but they are what they are and for good reason. But to attack with political motivation is just more bating tactics by the circular logical left and whining because it is well-known that conservatives donate more to charities and causes than liberals do. And I've always liked the fact that the intellectual elitist and somehow holier than thou, John F. Kerry accessed his money by marrying the widow of a wealthy Republican Senator. But he's probably not a concern as I doubt that he really donates much to any cause or charity...or does he?
In summation, the tax should be fair and fair means equal and low. High tax rates aren't fair because they put the average worker out of work - as again, the investment dollars putting them to work, travels to a higher-return, low-taxation location. If indeed tax breaks are given to corporations to help them stay competitive with their corporate adversaries who have special deals from their own governments, or to induce R & D for the benefit of solving the energy problem or national security or whatever, so be it, but let's call a spade a spade, not get involved in emotional class warfare...as long as we have capitalism. It's too easy to attack and insult capitalists for greed and it's not the answer, sound economics is. As Milton Friedman said to Phil Donahue when asked about capitalism and greed, "Well first of all, tell me, is there some society you know that doesn’t run on greed?" And he followed with, "Despite its faults and its problems, capitalism, the free market system, is the only economic system ever devised by mankind to allow the common man to rise up."
Enough with the name-calling and insults. Study sound economics and get ahold of the empirical evidence that supports low tax rates - they've worked every time they've been tried...even JFK knew this.
August 21, 2011 11:33pm
Has it occurred to you that when one is at a social event and meets a person like one of the Koch brothers they might say "what a charming lovely sophisticated person." Everyone likes thinking they are a good person. I'm sure the Koch brothers do.
I think what is being pointed out is that the Koch brothers and there ilk have such narrow points of view they forget that if it weren't for the land they live in providing them with an infrastructure they could not do business.
It seems to me if one has products to be delivered they need roads and bridges. They need an educated work force to do there R&D. Without taxes how do we pay for those things.
I'm all for the competitive spirit but find it a bore to watch a game that is rigged. The Koch brothers are very active members of ALEC. They create legislation written by large corporations and businessmen. Since prisons have been privatized they (ALEC) are responsible for writing draconian drug laws that have swelled prison walls. The tax payers pay for prisons. It is a fact that prison labor at $.20 per hour is being used to prepare school lunches and even help manufacture guidance systems for our government. Is slave labor ok with you? No problem for the Koch brothers.
The Italians have a saying "The fish rots from the head". The corporate structure is very efficient, but part of wealth is health, and the health of a community suffers when people who have the savvy to lead are disconnected from the reality of their fellow citizens. Like the SEC revolving door shredding machine. Talk about foxes guarding the hen house.
One thing I have to say about Buffet is he's a good old fashioned capitalist who understands when an organization has integrity and produces value instead of just the bottom line at any cost to nature and society it's a keeper. Well I'd like to think that. GE created a positive balance of trade by redesigning their locomotive from scratch due to a regulation. Now just about every county in the world that needs a locomotive buys GE. Made in the USA. They didn't wine they got to work.
Our leaders (business people)need to be aware and accountable, don't fall into the trap that Eichmann did in Germany thinking he was a wonderful man while committing genocide. The Koch brothers suffer that type of myopia. They just don't see that by doing what they are doing they are increasing, to a great extent, the probability of the extinction of our species.
Remember life will flourish on this planet if humanity makes itself extinct, just not us. Send your friends the Koch bros a new set of glasses.
August 21, 2011 12:58pm
You can look on line for a list of companies owned by the Koch brothers. I keep this (long) list in my bag and make sure I never buy any of their products at the grocery store.
August 21, 2011 12:57pm
It has been a log time since I have been to Hershey, PA, but the last time I was there, I didn't see any foreign workers there. Times must have changed.
August 21, 2011 12:53pm
Who is John Galt?
August 22, 2011 6:21pm
Assuming that you are asking an honest question out of ignorance and not being snarky .... John Galt is a character in Ayn Rand's novel Atlas Shrugged.
August 21, 2011 12:55pm
Nobody. Doesn't exist.
August 21, 2011 12:51pm
It's rapacious swines likes the Koch's that will bring down capitalism. Their unrelenting greed coupled with their refusal to contribute a greater share of revenues to offset our federal debt, when under Pres. Eisenhower, the tax rate was 90% for top earners like them -( they should kiss the ground for how much less they have to pay today) - but instead their avariciousness at the expense of millions of low
August 21, 2011 12:49pm
Well, yes - if your value to society is measured by the value of the John Birch Society, your ability to destroy the environment, suppress workers, and perpetuate the criminal activities of corporate scoundrels, then I suppose this may be true. Personally, I believe those like the Kochs should be tried as the criminals they are and executed. Hopefully, as the American people are dragged sufficiently low, they will take a lesson from the French Revolution, and drag all these rich dirtbags from their McMansions and up to the guillotines, as they so RICHLY deserve.
There WILL be blood!
http://www.republicratjunta.com
August 21, 2011 12:42pm
The Koch bros are worth $22.5 billion each.... Here's just some math for perspective:
Suppose you make the average annual salary in the U.S. of $44,410. It would take you 22,517 years to earn a billion dollars. (Assuming you paid no taxes. Like many of the most profitable corporations.)
August 21, 2011 12:51pm
Koch Industries employs over 200,000 people and almost all of them make well over $44,410 per year. Should they quit?
August 21, 2011 1:05pm
No, but maybe they should ask themselves where the two Koch brothers would be without 200,000 workers doing the work of their corporations. So why don't these workers have a representative on the Board of Directors? Why don't they get a share of the company? How long should the Koch Brothers' initial investment (if there was one--didn't they inherit their aristocratic position?) earn them billions and billions? Their ownership, like the divine right of kings, is apparently their entitlement forever and ever, the gift that keeps on giving--to them, not to workers, nor the government that paves their road to work.
August 21, 2011 12:15pm
koch=scum
August 21, 2011 12:15pm
Polluters International..should be the name of the Koch Bro's Business ventures!Shame on them and their uncontrollable GREED!
August 21, 2011 12:07pm
Bullets, rope, deep water - all are solutions that have proved successful against the likes of the Kochs.