Warren Buffett: "Stop Coddling the Super-Rich"
Billionaire Warren Buffett believes he just isn’t being taxed enough.
The CEO of Berkshire Hathaway Inc (NYSE: BRK.A) made this clear in an article published in the New York Times, where he urged Congress to see the flaws in the system.
He says that he and his wealthy friends are spoiled, and that “…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.”
The numbers put it in perspective.
Buffett notes that last year his federal tax totaled $6,938,744 – just 17.4% of his total taxable income.
He says that even the other people in his office paid significantly more – between 33% and 41%.
And while he and his rich friends pay minimal, often even negligible payroll taxes, middle-class Americans face hefty ones.
Buffett quotes IRS data from 1992 and 2008, when the income and tax rates of the nation’s wealthiest 400 citizens were compiled.
In 1992, he reports, the 400 richest reported $16.9 billion in taxable income, and of that 29.2% was paid as income tax.
In 2008, that number jumped to $90.9 billion, while the tax rate dropped down to 21.5%.
These rates are shocking. It goes to show what could be done if tax rates on these wealthy citizens were increased high enough to coincide with those of middle class citizens.
And Warren Buffett believes, contrary to popular argument, that this would do little to investment and job creation.
He cites investment rates from 1976 and 1977, when capital gains rates were 39.9%. No one stopped investing even then, he says.
And “a net of nearly 40 million jobs were added between 1980 and 2000,” when taxes for the rich were much higher. “You know what’s happened since then: lower tax rates and far lower job creation.”
He proposes a plan for the 12-member panel of Congress designated to decrease the 10-year deficit by $1.5 trillion.
First off, he says, aim for $1.5 trillion as a minimum.
And to effectively stimulate the economy, leave stationary the tax rates for 99.7% of the nation’s taxpayers.
But within that extra 0.3%, the taxes for Americans making more than $1 million should be raised right away.
And for those with taxable incomes of upwards of $10 million, tax rates should increase further.
“Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems,” he says. “Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness.”+15
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