Washington should heed Buffett’s call for sacrifice
Washington should heed Buffett’s call for sacrifice
San Jose Mercury News: Billionaire Warren Buffett’s op-ed piece in the New York Times on Monday provided a neat bookend to Thursday’s Republican presidential debate. Every last one of the contenders in that debate pledged they would never agree to raise taxes, even if $1 trillion in revenue were accompanied by $10 trillion in spending cuts. But here is Buffett, among the richest of the rich, advocating higher taxes on those making $1 million or more a year.
The contrast neatly captures the difference between sane, realistic thinking and the policies being promulgated by the tea party.
Buffett, whose $45 billion fortune ranks him second on Forbes’ list of richest Americans, is perfectly positioned to counter the destructive notion that taxes can never be raised, even when they’re at historic lows, as they are today. Perhaps he can persuade his pal Bill Gates — tops on the Forbes list with $54 billion — to come along for the ride.
Together, this pair has gotten dozens of the uber-rich to sign The Giving Pledge, a commitment to donate the bulk of their fortunes rather than passing them down.
Why not launch a similar campaign to get their wealthy friends to urge Washington to adopt a more fair tax system?
Buffett cites the absurdity of the carried interest exemption, which allows billionaire hedge-fund managers to be taxed at 15 percent while the middle class pays 25 percent. Last year, he says, he had the lowest tax rate — 17.4 percent — of anyone in his office, where the average rate was 36 percent.
Business experience
Most convincingly, he cites his experience as a businessman. He says he has never seen anyone “shy away from a sensible investment because of the tax rate on the potential gain.” In 1992, he says, the top 400 earners in the country made a total of $16.9 billion and paid a federal tax rate of 29.2 percent. In 2008, the total income of that group had more than quintupled, but their tax rate had fallen to 21.5 percent — just as the Great Recession was taking hold.
So much for lower taxes helping “job creators” keep the economy humming.
Buffett isn’t simply arguing that the rich can afford to pay more. He’s saying that the poor and middle class have suffered disproportionately, through their military service and the Great Recession. He ends his piece by saying that it’s time for the wealthiest to share the sacrifice made by less-fortunate Americans.
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