Warren Buffett Wants Higher Taxes On The Super Rich

In a move that shouldn’t be that surprising from someone who promised to donate 99% of his wealth to charity, Warren Buffett, the third-richest person in the world and staunch Obama supporter, wrote an editorial in The New York Times on Sunday mocking the Tea Party’s refusal to raise taxes on the super-rich. His main point is that their belief in Reaganomics and trickle-down theory is unsubstantiated in fact, because a lot more jobs were added in the 1980s and ’90s when taxes were a lot higher on the rich, than have been in the past decade. And on top of that, he personally has never met the investor that quit investing due to the tax rate.

Warren Buffett and President Obama at the Oval Office in July 2010

 

Buffett also says the tax rate is unfair to the middle class because a lot of the super-rich either don’t work or just don’t get a paycheck like normal people, so while they get taxed on what income they make from interest, capital gains and what not, they don’t get hit with the Social Security and FICA taxes that everyone else does. What this amounts to is that the super-rich pay around 15% in taxes, while the average American pays around 25%. For example, he only paid 17% in taxes last year (on 40 million$ in earnings), while the other, less wealthy, people in his office averaged twice as much, at 36%. And from 1992 to 2008, the average tax rate on the 400 richest Americans dropped from 29.2% to 21.5%. His suggestion to level the playing field: create two new tax brackets, one starting at a million dollars per year and another one starting at ten. And tax those people a lot.

No word on the reason he doesn’t care if the feds Robin Hood all his money: whether it’s because he’s 80 and not long for this earth, or because he’s already giving all his money away to charity. In either case, it’s going to be hard for the other 399 super-rich people to see this editorial as altruistic rather than self-serving, coming from someone who has nothing to lose and everything to gain by being generous in his old age. And it’s going to be hard for Congress to justify imposing not just an equal effective tax rate on the rich, but a much lower one.

Update: The Cato Institute responded to Buffett’s editorial.

From The New York Times, via NPR

3 Comments.

  1. Baguette Vending Machine | Apt46 - pingback on August 15, 2011 at 6:52 pm
  2. I have no idea of his religion, but this seems to me to be the epitome of Matthew 19:21:

    ‘Jesus said to him, “If you would be perfect, go, sell what you possess and give to the poor, and you will have treasure in heaven; and come, follow me.”’

  3. Response To Warren Buffet’s Calculations | Apt46 - pingback on August 16, 2011 at 9:57 pm

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