Warren Buffett calls for shared sacrifice from the rich; Obama agrees, but will the Super Committee of 12

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.

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  1. Edward
    Posted August 15, 2011 at 11:39 pm | Permalink

    Because it’s kind of related.

    Starbucks Corp. (SBUX) Chief Executive Officer Howard Schultz urged other CEOs to boycott donating to U.S. political campaigns to encourage leaders to solve the nation’s growing budget deficit.

    “I am asking that all of us forego political contributions until the Congress and the President return to Washington and deliver a fiscally disciplined long-term debt and deficit plan to the American people,” Schultz wrote in an e-mail sent to business leaders that was obtained by Bloomberg News.


  2. Bob
    Posted August 16, 2011 at 8:54 am | Permalink

    Buffett is such a vilified person. His words, combined with the evil New York Times, is not going to help the situation. Too bad. Are people paying attention to the footage of Rick Perry from the last few days? That guy scares the shit out of me. He’s a more devout, angrier, and smarter George W.

  3. Delphini
    Posted August 16, 2011 at 9:09 am | Permalink

    Buffett Is a traitor to his class. He should be made to wear clothing from Sears.

  4. Glen S.
    Posted August 16, 2011 at 9:37 am | Permalink

    First of all — exactly where in the Constitution does it say that it is acceptable to give a very small, select group of Senators or House members significant powers to write and offer historically sweeping legislation that can only be passed by the full body on a restricted, “Up or Down” vote? What does it say about the concept of “one man, one vote” when, under the so-called “Super Committee,” Senators and House members from certain states/districts will have unprecedented powers to shape such crucial policy proposals — while other districts (and even whole states) will have virtually no say?

    Aside from being unprecedented (and likely, unconstitutional), the “Super Committee” is clearly nothing but political window dressing designed to enable Washington power-brokers to *finally* force through what several “bipartisan” commissions (as well as President Obama) have been recommending all along — unprecedented “reforms” to key elements of our nation’s social safety net (Social Security, Medicare, Medicaid, etc.) that politically, would be next-to-impossible to implement through the “normal” (legal) process.

    Perhaps the saddest part of all, however, is that, over the next several months — while Congress and the White House (and the mainstream media) are busy tying themselves in knots over the political machinations of the “Super Committee” they will continue to ignore the potential for real, substantial reforms that would not only help ordinary Americans right now — but ironically, would in the long-run, do much more to begin to bend the deficit curve in a more positive direction:

    * An aggressive, quick-start program to create more and better JOBS, right now — to get more people working (and paying taxes) again, as soon as possible.

    * A serious effort to deal with the MORTGAGE/FORECLOSURE CRISIS — to help families stay in their homes, and to stem the ongoing slide in home equity and property values that is devastating communities across America.

    * An overhaul of our completely unbalanced and misguided TRADE POLICIES such as our multiple “free trade” agreements and “most favored nation” trade status for China — in order to begin to provide incentives (rather than disincentives) for companies to invest in domestic production and manufacturing.

    * Real (rather than rhetorical) EDUCATION REFORM — with the emphasis on investing whatever it takes to make sure every child in America has a full and equal chance to reach their full potential — be it an advanced university degree, a community college diploma, a skilled-trade certificate, apprenticeship, or whatever …

    * An all-out program to invest in our CRITICAL INFRASTRUCTURE — including building (or rebuilding) the roads, rails, ports, dams, canals, power plants, etc. that will be necessary for America to re-build our lost manufacturing base — and to provide the foundation for …

    * A “moon-launch”-style effort to make America a leader in ENERGY SELF-SUFFICIENT — focused on domestic, renewable sources, and hopefully allowing us to untangle ourselves from the so-called “War on Terror.”

    Unfortunately, none of these items seem to be a priority for the various corporate interests that now essentially “own” our two major political parties — so instead, we will all spend the next few months watching the new “Super Committee” — and later Congress — as they wring their hands and grit their teeth while “reluctantly” voting to pass a series of new “painful,” “dreadful,” “regrettable …” cuts to programs that have provided a modicum of security for poor and working Americans for decades.

  5. Glen S.
    Posted August 16, 2011 at 9:44 am | Permalink


  6. Chairman Meow
    Posted August 16, 2011 at 11:03 am | Permalink

    It’s always fascinating to see what billionaires do with their guilt. Buffet’s got blood on his hands, and no amount of grandstanding will ever change that.

    In sum: change always begins near the grass’s roots. Fuck what’s being proclaimed from the top of towers.

  7. Maria
    Posted August 16, 2011 at 12:57 pm | Permalink

    There’s is an argument to let the foreclosures go forward, and let the market reset to their true value. Mucking around by artificial propping up houses, makes it harder for people who are earning less from getting into the housing markets. Price is set by what people can buy, after all.

  8. Maria
    Posted August 16, 2011 at 12:58 pm | Permalink

    I agree, Buffet is feeling guilty.

  9. BrianB
    Posted August 16, 2011 at 1:12 pm | Permalink

    Nice comment Glen, it would be even nicer to see it printed on the op/ed page of a newspaper, if you’ve got the time for that sort of thing.

  10. kjc
    Posted August 16, 2011 at 2:55 pm | Permalink

    “There’s is an argument to let the foreclosures go forward, and let the market reset to their true value.”

    according to the market, there is in fact no true value.

  11. Posted August 16, 2011 at 6:32 pm | Permalink

    Buffett could always simply pay more in taxes. As a matter of fact, so could the Washington politicians.

    Where are they showing how patriotic they are by voluntarily paying extra in taxes to help reduce the deficit? Wouldn’t that be something – a patriotic campaign to pay a little extra to help out the country.

  12. Posted August 16, 2011 at 8:26 pm | Permalink

    Buffett’s not the only one: http://patrioticmillionaires.org/

  13. Meta
    Posted August 16, 2011 at 10:54 pm | Permalink

    Fox’s Eric Bolling Asks If Warren Buffett Is “Completely A Socialist”


  14. kjc
    Posted August 17, 2011 at 9:09 am | Permalink

    if he gave money to the govt to give to the people, would that make him a national socialist?

  15. Meta
    Posted August 24, 2011 at 9:18 am | Permalink

    Many of the super-rich in France are asking to be taxed at a higher rate.

    “We are conscious of having benefited from a French system and a European environment that we are attached to and which we hope to help maintain,” the petition said.

    This to me is patriotism, not putting a magnetic ribbon on the back of your SUV saying that you support the troops.


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