How can anyone call it class warfare when the case against the rich is being argued by one of the richest men in the world? Warren Buffett is one of the most successful investors ever, and yet he makes an iron-clad case that the US is coddling the super-rich. Buffett points out that he pays a smaller percentage of his income (17.4%) than all of the people who work in his office (average 36%). That’s right, his tax rate is less than half of rate people working for him pay. He adds that some of his super-rich friends pay even less.
Why? Because if you make money from investments, you pay 15% on most of your earnings. Not only that, but payroll taxes (which support social security) are capped, so the rich pay a minuscule percentage of their income on that.
But my favorite part of his article is where he explodes the myth that low taxes encourages investment. As he puts it:
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.
So who are Republicans trying to protect when they refuse to raise taxes on the super-wealthy? They sure aren’t trying to create jobs.
Buffett concludes “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.”
UPDATE: Obama agrees with Buffett on taxes.