Stop Coddling the Super-Rich
 

Interesting opinion today from one of the US's richest people. Here is what he wrote today:

Stop Coddling the Super-Rich
By WARREN E. BUFFETT
Omaha

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.

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.

To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.

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.

Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.

The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)

I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.

Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.

Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

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.

Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway.

that's incredible that someone of his status stood up to his own government. Good for him for being honest with the people and telling it straight.

The thing that is contradictory is that Buffett says all this crap, along with all the liberal elitists, and yet they don't put their money where their mouth is.

If Buffett thinks he is taxed too little and want's to keep touting his liberal talking points, he should give this site a visit and drop a few million since his liberal guilt is overcoming him...

https://www.pay.gov/paygov/forms/for...ormId=23779454

Once I see the donation form filled out, then I will consider him a man of his word.

Ideologies talk, yet bull**** walks.

^ exactly. What a useless rant. I bet he went and bought a few Ferrari's after writing that. Oh well.

Is it tax deductable? LOL

maybe you haven't heard of the The giving pledge.

.... that or you are just butthurt he makes more money than you can think of.

----Left Unmentioned----

I do know about the Giving Pledge, actually. I'm not butthurt at all, just making a point that he talks all this 'More Taxes' is just BS and he should stop being quoted on every single talking point.

He is saying its easy for him and his super rich friends to take advantage of the system as is, and they do... because financially, why would you not? Just because you have a **** ton of money, does not mean you start being stupid with it. Also, I think he would probably just give it to charities instead of the gov if he can. hence the giving pledge.

This is true, but I still think that he and Matt Damon should give checks for a few extra mill a year if they feel the system is that messed up and keep running their mouths and making these statements. It's one think to say it, but just give it if you think you owe more as an individual -- then nobody such as myself will be making this point.

In regards to the Giving Pledge, I hope a majority of it is helping our own impoverished and disadvantaged first. My two cents!

(I made the Matt Damon comment due to a recent interview he had about the government debt and whether taxes should be raised further for the upper class.)

The Liberal elite is at least asking for tax rates to be back where they were as apposed to asking for things like Medicare / social security to be dropped/cut or even lower rates to make themselves more money!. I do understand your point though! but, I think they understand that just them paying more won't do shiz, it needs to be all of them (the super wealthy).

I think its honorable for them to at least suggest it. It shows they are more for This Countries stability then their own personal gain.

Buffet has been quoted as saying that he and his family won't need or consume 99% of his wealth. He pledged to give away much of his wealth after he passes. I can't remember which groups will be getting the bulk of his money but he said to like the Bill and Melinda Gates Foundation.

He still drives a 90's buick so I am thinking he didn't go pick up a ferrari after writing that.

why does he have to give money and prove it to you? you think everyone needs to give a million then show it off? that's not the point behind giving. you give because you can, not for show and the ones that do it for show are doing it all for the wrong reasons. no one needs to know I donate to make me feel good about it.

if I could sit down with the man with a tape recorder for an hour or 2 just to hear his thoughts I would. I heard something a while ago, "The rich take advice from those that are just as rich or richer, the poor take advice from their friends." the rich are rich for a reason maybe the gov needs to be taking some notes.

The rich are rich for a reason, absolutely. And I know he gives because he can, I wasn't denying it... I was making the point, which I will make again, is that if he feels he is taxed so little, don't just let rhetoric do the talking -- pay more taxes if you feel that way -- it's more credible to say, 'Hey, we don't pay enough, so I upped my taxes on my own and wrote an additional 17% in federal taxes!'.

That was the only point I was making, and I don't think it was a bad one, either.

My father is CEO of a Berkshire Hathaway company in Wayne, PA. Warren requested to purchase the company in 2000/2001 and they landed a deal. My parents attend annual shareholders meeting once a year in Omaha as well as a Berkshire event as well. Warren certainly is a character to hear from, but on politics, he is madly left and can wander to his rhetorical rants.

The last thing these popular icons, whether they be Matt Damon or Warren Buffett, should be preaching about is how we need to find more revenue, but they ought to legitimize the urgency of cutting spending. Just because I spend $500 a week and am running in the red doesn't mean my credit line should extend me an additional few hundred $'s -- rather I need to spend within' my revenue.


As for giving and showing off and talkin' like you're a 'boss' -- that's what I call 'Trumping'. :-p

If you confiscate 100% of all taxable income of the top 1% of earners, we still fall short $300B for this year's spending alone. This isn't a revenue problem. This is a spending problem.

Woohoo talking points! I agree with the spending problem over revenue problem, 100%.

I would hope everyone would agree with this but apparently some of congress does not. Everything needs to be taken back to square one and it all needs to be looked at as "Is this REALLY needed" if not or the private sector can handle it then drop it. if it is needed restructure the program if its costing too much money. I don't think this is over, I don't even think we're even at the worst of it yet. more people are gonna lose jobs and the economy is gonna get worse.

if you were a billionaire would you really voluntarily pay more taxes? if anything you would lobby to impose more taxes if you believed it, but you wouldn't just pay more.

Anything that isn't in enumerated as a power of federal government in black and white in Article 1 Section 8 of the Constitution needs to go.

That would be because the top 1% shows hardly any taxable income :mrgreen:

Spending is of course an issue that we can all agree on but its kinda off topic per this thread. The topic is the very wealthy paying their fair share during times of recession when everyone else is hurting and they're profits are soaring.

These "evil" Liberals would rather pay higher taxes then see Educators lose their Benefits and taking on pay cuts (the type of cuts going on). Its almost like they care more for our Countries people as a whole rather banking another mill. in tax loop holes.