Warren Buffets tells US Gov’t: ‘Stop Coddling The Super-Rich’
Warren Buffett has been very outspoken about the fact that his secretary pays more proportionally in taxes than he does. You hear very little of this because it doesn’t fit all tidy into the beltway/Republican narrative of cutting taxes and cutting spending. Buffett took to the NY Times to write an op-ed using statistics to back up his major theme. The rich invest money no matter what the tax rate is and do not stop creating jobs because everybody isn’t praising them for being so wealthy. Warren Buffett in the NY Times : OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched. While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors. These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places. Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent. If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot. To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot. Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends. I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation. Our tax rates are lower now than they have been for decades yet the super rich corporations are sitting on their pots of gold and not creating jobs. Careful Warren, CNBC and Fox will tell you that if we’re mean to these job producers they will stomp their feet, storm off and take all their jobs with them and leave the country. Nonsense. What shared sacrifice means to the Villagers and the GOP is that the middle class and the poor should be willing to have their social safety nets cut while federal government spending gets slashed in an effort to appease the deficit hawks coming out of the Republican party even though their leadership and policies caused the global financial depression. Historical data or even information garnered from the last ten years has no place in the discussion. Suck it up, America. Buffett is calling out the Congress to get busy and do their jobs instead of pandering to an ideology that has no room for compromise and raising revenues or taxes is tantamount to Socialism. Wanna bet how many times you hear about this op-ed on TV? But if David Brooks or some nut from the op-ed pages of the WSJ pens a piece that defends the fragile and misunderstood Masters of the Universe, it’ll be repeated 24/7.
Warren Buffets tells US Gov’t: ‘Stop Coddling The Super-Rich’
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on August 15, 2011. Filed under