1998: How could the U.S. control campaign spending?

AUDIENCE MEMBER: My name is Kristin Cham (PH). I’m from Springfield, Illinois. And I’m a proud shareholder of Berkshire Hathaway. (Applause)

WARREN BUFFETT: We’re glad to you have you here.

AUDIENCE MEMBER: I’ve heard a little about your thoughts on trying to control campaign spending. Could you tell us more about your thoughts and efforts on this topic? Thank you.

WARREN BUFFETT: Charlie, did you get all of that?

CHARLIE MUNGER: I think it was campaign spending.

WARREN BUFFETT: Oh, campaign spending. Yeah, I have joined something that Jerry Kohlberg — this is personal. This has nothing to do with Berkshire — that Jerry Kohlberg spearheaded.

And it’s taken a position — and probably 30 or so mostly business people — taken a position against soft money, and also taken a position on very fast disclosure of campaign finance money, because I personally think that the arms race, in terms of campaign spending by businesses, you know, has just begun. It doubled in the last election.

But political influence — and I don’t mean that by buying a vote, but I mean just in terms of having a (inaudible) in Washington or in other state capitols.

Political influence has been an underpriced product in the past. I mean, the government is enormously important in this country to most companies. It was amazing how cheap — cheaply — it could be — attention could be purchased.

But the price is going up, and there will be an escalation. And I don’t think it’s easy — if you’re the manager of a business and you own 1/10th of 1 percent of it and you’re in a business that’s heavily affected by government, I don’t think it’s very easy to tell your board of directors that you’re going to take a hands-off approach.

So I think legislation is needed in that arena, and there are over a hundred campaign finance reform bills that have been introduced. Everybody wants to have their name on a bill. They just don’t want to have it passed. (Laughter)

And, you know, John McCain’s been working hard on it. And it’s something I think we have to come to grips with because it’s going to be a battle of the wallets for influence.

And, like I say, if I were running some other company, and my competitors were spending money to get the attention of would-be legislators, or actual legislators, it’d be very difficult to take some high and mighty position that I wasn’t going to do it myself, and my board and my shareholders might ask me why I was taking that position.

We are lucky, basically, to be in a business that’s relatively unaffected by legislation, although we will — we’re going to pay a lot of tax this year. I said two years ago that it would only take 2,000 entities in the whole United States — businesses, individuals, any kind of entity — to pay the same amount of taxes as Berkshire, and that would take care of the entire budget.

You’d need no Social Security taxes. You’d need no nothing.

I think we’re going to be able to say that again this year. I think that if you multiply our tax by 2,000 you will more than account for the entire federal budget, including Social Security and everything else.

So you might say, “Why aren’t you in Washington lobbying for a capital gains rate at corporations that’s the same as individuals?” or something, but we basically haven’t played that game. We feel very fortunate.

I’ll say this. I would rather, in this country, be a huge taxpayer myself than be somebody who needed the other end of it, the government dispensing.

I mean, if anybody here is paying taxes and they want to — (applause)

If you’d like to shift positions with somebody in a veteran’s hospital or, you know, that has a couple of children by age 19 and is getting a check from the government, you know, I don’t want to shift positions. I’m happy to be paying the taxes.