Monday, August 15, 2011
Warren Buffet: Tax the Rich
Well duh. But apparently Congress is hard of hearing. More likely they are wearing diamond-studded ear plugs. When Warren Buffet, one of the richest men and savviest investors on the planet talks about improving the economy we should listen and listen good. We might recall from Too Big to Fail that scene where Hank Paulson is at his wits edge and who does he call? You guess it, Buffet. So what does Buffet advise?
He first observes that the poor and middle class fight for us in wars while struggling to make ends meet, and yet their tax rates are effectively less than what he and his rich buddies pay. One way this happens is that capital gains are taxed at only 15% instead of the higher income tax rates. He notes his entire tax burden last year amounted to 17.4%, much lower than his staff's income tax rates averaging 36%.
He also disabuses us of the conservative canard that the rich won’t invest if their tax rates are higher. During the 80s and 90s the wealthy’s tax rates were much higher and it did not stop investment one bit. To the contrary in fact between 1980 and 2000 during those rates 40 million jobs were created. Since then, with lower tax rates, job growth has slowed to its current anemic levels.
He strongly encourages the new Super Committee to consider raising tax rates, but only on the top 0/3 %. It is the only way to dig our way out of the financial hole we’re in. And he is sure that those like him will not only have no problem with it but will welcome paying the extra rate, for it will spur economic growth and they will make even more money therefrom. Consider the extra taxes not a burden but an investment, with a return that far exceeds that investment.