Warren Buffett: Stop Coddling the Super-Rich

[Duane 3NE 2NR]

very interesting read:

Stop Coddling the Super-Rich

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.

[homeboy]

rich get richer......

[Kiro_lee]

This is nothing new, and it most likely will never change, most people see money as something you work for, rich people see money as something that works for them. If normal people would stop looking at their house and cars as assets and consider them liabilities and really understand what an asset is their bank statement would look much nicer.

[Seeker]

True...because the rich don't see the individual working class person...they actually see numbers on a piece paper.

[pugboy]

buffett dreaming, the same people who do the legislation in washington are very likely the same people who have money in his funds and like it that way

[Smokey]

Good Advice, but Buffet is being a bit hypocrital after benefitting from major tax breaks recently.

Regardless, I support a flat tax system.

[Bizzare]

This is nothing new, and it most likely will never change, most people see money as something you work for, rich people see money as something that works for them. If normal people would stop looking at their house and cars as assets and consider them liabilities and really understand what an asset is their bank statement would look much nicer.

[Kiro_lee]

This is nothing new, and it most likely will never change, most people see money as something you work for, rich people see money as something that works for them. If normal people would stop looking at their house and cars as assets and consider them liabilities and really understand what an asset is their bank statement would look much nicer.

[Bizzare]

Can someone summarize for me plz.
From most comments seems like a story to make the poor act bitchy.

(kiro lee, you doz live in arima oarr. I think I haz seez you once or twice ??)

[Kiro_lee]

Can someone summarize for me plz.
From most comments seems like a story to make the poor act bitchy.

(kiro lee, you doz live in arima oarr. I think I haz seez you once or twice ??)

I live close to Stephonie. So yea Arima side.

[silent_riot]

It will be interesting to know how many other millionaires support this move.
I think he is thinking about the long term. If what he suggests actually happens, in the short term, the taxes may be high, but the gov't is not going to keep the taxes high forever for these "job creators".

[supremacy_007]

very interesting read

[Stephon.]

Can someone summarize for me plz.
From most comments seems like a story to make the poor act bitchy.

(kiro lee, you doz live in arima oarr. I think I haz seez you once or twice ??)

I live close to Stephonie. So yea Arima side.

Say D'Abadie nah. Arima embarrassing to live.

[Stephon.]

Didn't read, so I'll just go off on the comments, the thing about poor people is they live for today, they live to survive, they don't live for the generations to come. This is why the poor black man in POS will die and leave rent/loans/bank notes/car loans etc. to pay back, and the cycle goes on for generations. Why not live and work for your children? Why not have a house for your children, or land even, so when you die you know that your children are secured. Death can take anyone at any time, so the sooner you make sure you're +ve in terms of money and assets, the better it is for your future generations. Poor people need to start thinking long term and not live for today and see what food they can eat for today and start saving, only then they can close the gap between them and the wealthy.

[crazybalhead]

Can someone summarize for me plz.
From most comments seems like a story to make the poor act bitchy.

(kiro lee, you doz live in arima oarr. I think I haz seez you once or twice ??)

I live close to Stephonie. So yea Arima side.

Say D'Abadie nah. Arima embarrassing to live.

[16 cycles]

Say D'Abadie nah. Arima embarrassing to live.

why?

[Stephon.]

Too many negative stories come out of Arima, even in The Crossings, people are being robbed, Arima needs a serious clean up. That is my opinion and you will deal.

[16 cycles]

Too many negative stories come out of Arima, even in The Crossings, people are being robbed, Arima needs a serious clean up. That is my opinion and you will deal.

no

convenience of having everything within walking distance of the Dial surpasses many towns here and abroad....

is not for everyone....

[paparazzi]

Buffett's article is very deep and theis a very interesting insight into his feelings on the rich.

His proposal that the rich should be taxed more discloses to me 1) He has faith in a Government that they will utilise his tax paying dollars wisely and properly. 2) He has no faith in his fellow rich that they will spend their money for the good of the less fortunate.

Other memebers of the super rich have, instead of calling for higher taxes, donated significant portions of their fortune in setting up private foundations to help the less fortunate thereby redistributing their wealth. This of course lowers their tax liability as gifts to charity in the US are written off against tax liability. Case in point is Bill Gates who has for years stongly canvassed that the rich must give to the poor (to boil it down to its most basic terms).

Rattan Tata also shared this view. He lambasted Mukesh Ambani (India's richest man) for spending $1B USD on his residence and said the money would have been better spent on the poor that live outwith the walls of his towering palace. Of course, Ambani's response was "it's my money and I can do what I want".

[VexXx Dogg]

Great read.

[zoom rader]

Warren Buffett is right. But we have the same problem in Trini where people of the west pay little or no taxes and evade taxes by bribes

[eliteauto]

IBStephonie

[Stephon.]

Warren Buffett is right. But we have the same problem in Trini where people of the west pay little or no taxes and evade taxes by bribes

I agree, but whose fault is that?

[Duane 3NE 2NR]

Warren Buffett is right. But we have the same problem in Trini where people of the west pay little or no taxes and evade taxes by bribes

LOL

B.I.R. zoning?
so people in the east paying a different tax?
What tax people in Mayaro paying?

[zoom rader]

Warren Buffett is right. But we have the same problem in Trini where people of the west pay little or no taxes and evade taxes by bribes

I agree, but whose fault is that?

the people of the west under paid workers and that is why they resort to bribes. Tons of cloth come in next to nothing with little taxes being paid.

[zoom rader]

Warren Buffett is right. But we have the same problem in Trini where people of the west pay little or no taxes and evade taxes by bribes

LOL

B.I.R. zoning?
so people in the east paying a different tax?
What tax people in Mayaro paying?

who from the east and south brings in tons of cloth and white powder for sale?

[Stephon.]

I see you're still pressed zr.

[zoom rader]

I see you're still pressed zr.

Yup I press my shirts everyday

[Duane 3NE 2NR]

Warren Buffett is right. But we have the same problem in Trini where people of the west pay little or no taxes and evade taxes by bribes

LOL

B.I.R. zoning?
so people in the east paying a different tax?
What tax people in Mayaro paying?

who from the east and south brings in tons of cloth and white powder for sale?

wow you're not only racist (as seen in your other posts), but you're also a slanderer

[zoom rader]

Warren Buffett is right. But we have the same problem in Trini where people of the west pay little or no taxes and evade taxes by bribes

LOL

B.I.R. zoning?
so people in the east paying a different tax?
What tax people in Mayaro paying?

who from the east and south brings in tons of cloth and white powder for sale?

wow you're not only racist (as seen in your other posts), but you're also a slanderer

Where in this statement does it say I am a racist?
Where in this statement does it say I am a slanderer?