Rick Wilking/Reuters
- Joe Biden and Warren Buffett share the view that America has unrivaled potential to be a global leader.
- “Just got off the phone with Warren Buffett, talking about how we have position unlike 50, 70, 80 years ago to lead the whole damn world in a way that no one else can,” the Democratic presidential candidate said last week.
- The former vice president and the billionaire investor also agree on the need for higher taxes on the super rich, and that quarterly earnings guidance should be scrapped.
- “Warren Buffett said it best when he stated that he should not pay a lower tax rate than his secretary,” Biden’s campaign website reads.
- Visit Business Insider’s homepage for more stories.
Joe Biden spoke to Warren Buffett about America’s revitalized potential to be a global leader ahead of a virtual fundraiser last week, marking the first reported conversation between the two men this year.
The Democratic presidential candidate and the billionaire investor have similar views on several subjects. Here’s a look at the topics they agree on:
1) The US has bright prospects
Biden and Buffett are both optimistic about America’s future influence and prosperity.
“Just got off the phone with Warren Buffett, talking about how we have position unlike 50, 70, 80 years ago to lead the whole damn world in a way that no one else can,” the former vice president said last week.
Biden’s comment echoed Buffett’s view at Berkshire Hathaway’s annual meeting in May. “Nothing can stop America when you get right down to it,” the Berkshire CEO said.
2) The super rich should pay higher taxes
Biden and Buffett agree that the wealthiest people in America should pay higher taxes.
As vice president to President Barack Obama, Biden unsuccessfully pushed for Congress to pass the “Buffett rule” to ensure those earning more than $1 million a year would pay an effective tax rate of at least 30%.
The proposal was named after Buffett because the investor famously observed that he pays a higher tax rate than his secretary.
“Warren Buffett, who many people in America have come to know as an extremely successful, generous, and gregarious man, shined a very, very bright light on this subject,” Biden said at a campaign event in New Hampshire in April 2012.
“He noted the absurd fact that he as a billionaire, under the current tax laws, pays a lower tax rate than his secretary pays,” the politician continued.
Biden called for a change to that situation in a tweet at the time.
“I’m for the Buffett Rule because it just makes sense,” he said. “Like the President says—it’s not class warfare. It’s math.”
Biden plans to pursue a similar policy if he becomes president. Part of his plan to expand access to affordable healthcare is to eliminate capital-gains tax loopholes and roll back President Trump’s tax cut on the super wealthy, which would double the capital-gains tax rate to nearly 40% for those making over $1 million a year.
“Warren Buffett said it best when he stated that he should not pay a lower tax rate than his secretary,” Biden’s campaign website reads.
3) Corporations are too focused on the short term
Biden and Buffett have both flagged the problem of companies prioritizing short-term gains over long-term progress.
Economic growth and wage gains suffer when corporations pump up their stock prices instead of investing for the long run, Biden argued in a Wall Street Journal op-ed in September 2016.
Linking executive compensation to stock prices, unlimited buybacks, tax laws that treat investments as long term after one year, activist investors pushing for near-term gains, and a “financial culture focused on quarterly earnings and short-run metrics” all contribute to the issue, he said.
Buffett and JPMorgan CEO Jamie Dimon called for public companies to consider ditching quarterly earnings guidance in their own Wall Street Journal op-ed in June 2018. The two executives argued it encourages companies to sacrifice long-term progress and sustainability for short-term profits.
“Jamie Dimon & Warren Buffett’s call to end quarterly guidance is an important step toward ending our nation’s culture of short-termism,” Biden tweeted in response.
“America’s workers & investors will all be better off with a system that rewards those who build for the long-term,” he added.
A quiet alliance?
Biden shares Buffett’s positive view of America, his desire to raise taxes on the ultra wealthy, and his belief that a short-term focus hurts companies in the long run.
Buffett hasn’t publicly endorsed Biden for president, but given their agreement on several subjects, it’s easy to imagine the pair working together if the Democrat is elected.
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