Warren Buffett on legislators and spotted owls
We'll highlight some of his commentary here, but encourage you to read his entire piece, word by word;
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.He explains:
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.
Buffett tells us about his federal tax bill last year:
The income tax I paid, as well as payroll taxes paid by me and on my behalf ... 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.
In observing the proportion of tax paid by the super-rich, he goes on to debunk some common scare spin on investing and on jobs:
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.
A special committee is being convened in the U.S. Govermment , under the debt ceiling deal, to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. Buffett proposes that the committee raise the tax rate paid by those with taxable income of more than $1million a year, including dividends and capital gains which are currently taxed at a lower rate than payroll taxes. For those bringing in more than $10million, he suggests an additional increase in rate.
We and our partners have argued on issues not raised in Buffett's piece - issues that we have blogged extensively - that a large part of the deficit reduction equation is the closing of massive loopholes that allow for multinational corporate tax dodging offshore, as well as tax havenry by wealthy tax evaders.
But we applaud Buffet for his vocal stance on tax fairness.
He concludes his Op-Ed:
My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.