Tuesday, August 16, 2011

Warren Buffett Agrees with ME?!

Tax the rich!

Yeah, you'd pretty much expect to hear that from me. But what about hearing it from one of the rich? How about Warren Buffett?

You've heard it by now, Buffett is saying AGAIN, neither he, nor his uber rich colleagues pay enough in taxes, especially when compared to say, the people who work for him.

"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."

Of course this is making most people who believe that the profits of the rich are sacrosanct, cringe. Because if  Warren Buffet makes too much sense with this plea, then it means that their premise for the structure of economic recovery falls flat. You've heard it before: if we tax the rich more that will serve as a disincentive for job creation. And of course companies will move their operations over seas and that too will cost jobs. Interestingly enough, these same adherents never quite explain why after 10 years of the most generous tax cuts in our country's history wages flat lined and job growth was stagnant. A point which Buffet also alludes in his column. 

"...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."

Would tax cuts on the extremely wealthy make that much difference over time? It could, according to CNNMoney,   "If lawmakers added a new 50% tax rate to taxable income over $1 million, that could raise an additional $34 billion, according to the Tax Policy Center. So adding that new top rate might raise at least an additional $340 billion over 10 years."

"And if lawmakers opt to tax carried interest as ordinary income, the change could raise an additional $21 billion over 10 years, according to Joint Committee on Taxation estimates."
"What about tax rates on capital gains and dividends? If they were raised to 20% for individuals making more than $200,000 (and couples making more than $250,000) that could raise roughly $107 billion over a decade, the Treasury Department estimated last year. The rate increase would raise less if it were limited to just those making more than $1 million."
"All told, if one combines the three changes -- setting aside the economic effects if they were all implemented -- it's possible that Treasury could pull in more than $450 billion over a decade."

Of course the U.S. debt is deeper than $450 billion. But remember, we're also fighting two wars that need to end and need to end soon. After which there are some other tax reform measures we could go after, like the tax deduction for mortgages on second luxury homes (which is not just a tax deduction enjoyed by the 'super rich'). 

In other words, those who have benefited most from the 'prosperity' of an era in which money was made from money should share in helping us get out of the mess they've helped to create.  And those who are clamoring to protect their riches in the delusional hopes that one day they may be among them (here's a newsflash, ONLY 2% can be in the top 2%) but who have actually kept the engine running (through debt), can shoulder less of the burden. In case you haven't noticed - you've been shouldering most of the burden...

Wow! Warren Buffett agrees with me! Imagine that!

No comments: