It’s not exactly breaking news, as billionaire Warren Buffett has been saying for years that the wealthy need to pay more in taxes, but it seems as though this time a few important people, including the President, are paying attention. The following clip comes from Buffett’s op-ed in today’s New York Times:
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…
And here, perhaps most importantly, are Buffett’s recommendations for the twelve members of the bipartisan Congressional task force charged recently with righting the nation’s economic ship.
…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…
And, it’s probably worth noting that Buffett does not agree that increasing taxes on the wealthy will keep them from investing, as we’re always told that it will. The following comes from the Washington Post:
…Buffett noted Monday that the mega-rich pay income taxes at a rate of 15 percent on most investment income but practically nothing in payroll taxes. The middle class, meanwhile, typically falls into the 15 percent and 25 percent income tax brackets and is hit with heavy payroll taxes. He said Washington legislators “feel compelled to protect us, much as if we were spotted owls or some other endangered species.”
Buffett said he knows many of the mega-rich well, and most wouldn’t mind paying more in taxes, especially when so many fellow citizens are suffering. He also said he has yet to see anyone shy away from investments because of tax rates on potential gains, even when rates were much higher in the mid-1970s, 1980s and 1990s.
“People invest to make money, and potential taxes have never scared them off,” he said.
Oh, and Obama told a group in Cannon Falls, Minnesota today that he agrees with Buffet’s assessment. Now, let’s see if he gets the Congressional Democrats to back him up on it, and stand strong when things get contentious on the so-called Deficit Reduction Super Committee.
On that subject, here’s a clip from an NPR interview with Democratic Congressman James Clyburn of South Carolina this afternoon. (Clyburn serves on the Deficit Reduction Super Committee.)
NPR: I’m sure you are aware that, at the GOP presidential debate last week, all of the candidates were asked if they would support putting taxes up for compromise, even if the balance or the ratio was 10-to-1 in terms of cuts versus raising revenue and taxes.
Every one of the candidates said they would oppose it – (this) would suggest, does it not, that the issue of taxes is one that remains intransigent as far as the GOP is concerned, perhaps even on your committee?
CLYBURN: Well, it would suggest that, and the fact that all six Republicans on this committee signed this so-called Grover Norquist pledge. It would suggest that, but you know, former Senator Alan Simpson, I think, said it best. No one person ought to be able to hold the economy of the United States, the full faith and credit of the United States and the welfare of the American people in his or her vest pocket.
And that’s what this pledge does and I would hope that there would be sufficient outcry from the public. Already, I think, this morning, I read an op-ed piece that penned about Warren Buffett, who’s saying, we’ve got to stop coddling the super rich. That is what is going on here.
And it’s not just the Grover Norquist pledge that we have to worry about. There’s also the matter of organizations like the Club for Growth having poured tens of thousands of dollars into the coffers of many lawmakers now serving on this Super Committee. The following clip comes from the LA Times:
…The conservative Club for Growth and its members gave more money to lawmakers who are members of the new congressional “super committee” on debt than any other organization, PAC or group of individuals, according to an analysis from the nonpartisan MapLight.org.
Club for Growth, its members and employees, contributed more than $990,000 over the last decade, topping Microsoft, Goldman Sachs, EMILY’s List and others.
The club has been an influential force in political campaigns, and helped propel its past president, Sen. Pat Toomey (R-Pa.), to the Senate last fall. Toomey was named last week to the new super committee.
Over the next three months, the 12 members of the Joint Select Committee on Deficit Reduction will be tasked with recommending at least $1.5 trillion in budget cuts, a difficult assignment, and one that also concentrates tremendous power in relatively few hands.
Lobbyists have already begun trying to influence the debate, as our Los Angeles Times colleagues wrote earlier this month.
The Club for Growth and its vast member network often back conservative candidates in primary elections. It also supported super committee members Sen. Jon Kyl (R-Ariz.) and Rep. Jeb Hensarling (R-Texas)…
The good news is, two of the six Republican members of Congress serving on the Super Committee make their homes here in the mitten state. Fred Upton represents Michigan’s 6th District, with includes Kalamazoo, Benton Harbor and St. Joseph. And, Dave Camp represents Michigan’s 4th District, which covers much of the northwest Lower Peninsula, from Saginaw to Traverse City. So, it’s up to us to put pressure on these folks. If you live in communities represented by either of these men, please write to them, or call their offices. And, if you don’t live in either the 4th or the 6th, reach out to your friends and family members who do. It’s absolutely imperative that we counter the dollars being thrown at these men by lobbyists and organizations such as the Club for Growth who only have the best interests of the wealthy in mind. As Buffet said, the rich in our country are currently contributing at historic lows – thanks in large part to their efforts to buy access to our elected officials – and it has to stop now, before it’s too late. And, if recent history has shown us anything, it’s that we can’t count on the President to just do it for us. We need to take the fight to our local streets. We need to start holding demonstrations in the offices of men like Camp and Upton, and holding press conferences. We need to make our Representatives realize that, if they don’t start putting the needs of hard-working, non-wealthy Michiganders first, they won’t be returning to Washington… We may not have the money of the top 1%, but we have the votes.