Is Warren Buffet a Liberal Socialist Commie?

http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?src=tp

He must be!

Stop Coddling the Super-Rich
By WARREN E. BUFFETT
Published: August 14, 2011

Times Topic: Income Tax
Related in Opinion

Editorial: The Truth About Taxes (August 7, 2011)
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.

 

Yeah, how could Buffet be such a socialist. He should stick to making tons of money and stop trying to tell gov't what to do. Who does he think he is?

We need to trust people like the Tea Party - they have studied American History and understand global economics and revenue via visits to historical museums.

 

It's such a massive lie that get sold to people by the right. Based purely on greed, that is killing the country. Sucking the wealth out of the middle class and putting it into foreign countries. That's is essentially what has been happening over the past 30 years.

The Middle class standard of living has remained stagnant since the 80's. Or even gone down. Back in 1980, one good job could support a family. Now familes struggle with both parents working. That's ridiculous.

Capital gains should be 25%. And the Bush tax cuts should be revoked. It won't hurt economic growth at all,because the rich aren't going to stop investing in the u.s.....they will just put less money into foreign countries.

 

Then how come Canada now has a higher standard of living then us?

Canada.


It's not the budget and lifestyle. It's the rising costs and stagnant income levels. In fact, people live a less luxurious lifestyle today than in the 80's - that's what a decline in standard of living means.

 

Technology has certainly created new ways for people to spend money. An Americans spend a lot - but it's that spend mentality that drove all this growth as well - all the riches. That's kinda the point, if you squeeze the middle class too much, then all the wealth is gone and the spending becomes unsustainable - a collapse.

Taxes and regulation is what keeps the middle class in power and prevents too much income disparity.

In terms of American spending habits - keep in mind that all that TV, entertainment, games, etc - amount for 5% of each persons paycheck. That's right 5%. And eating out is about 6%. So that is 11% of spend. A lot for sure, enough to save for a nice retirement. But excessive?

where does the other 89% go?

Transportation - and not 30k SUV's. Most people by Ford Escorts and Toyota Corallas now where the SUV craze was the 90's. It goes to Food - more for food at home. It goes for medical bills, college expenses...and mostly goes for housing. Nearly 40% goes to housing. No wonder real estate is the lynchpin of our economy.

My point isn't that Americans aren't wasteful - they are. But they've gotten a lot more frugal then they were in the 1980's - not the other way around. that's because their incomes have not gone up, but things needed to live as a functional member of society have.

So what does it mean? It means we save less and become more dependent on the gov't when things go wrong. when we lose a job, when we get sick, when we grow old.

That is what has happened. If you want to turn the tide, we have to adjust the reality - people need more wealth to save, and you can't create wealth if you let companies fleece the middle class. The gov't is about funneling wealth back to the middle class or at least preventing it from being sucked out.

Companies are giving our jobs to cheaper labor overseas, and they are nickel and diming people on ATM fees, on our investments, on cell phone charges - you name it. And they are sacraficing our health, our natural resources, our livlihood to make a few bucks now and leave us with the mess to clean up later.

that might be good for business in the here and now, but it's becoming clear it is a disasterous strategy for long term prosperity.