Legislators in Washington have been protecting the mega-rich, said Warren Buffett on Sunday, “much as if we were spotted owls or some other endangered species.” Pointing out that his income and payroll tax rate was less than half that of anyone else in his office, Buffett called such protections unnecessary and said that it was time for the wealthy—those who are at the top of the income levels in the U.S.—to be asked to ante up substantially more in taxes.
In an op-ed piece in The New York Times, Buffett, billionaire head of Berkshire Hathaway, called for the new congressional supercommittee to find not just budget cuts but also substantial new revenues, tapping the super-rich to provide those revenues and making the notion of shared sacrifice a reality.
Saying that paring the deficit through cuts alone will not be enough, Buffett asserted, “Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems.” To prevent that loss of faith from descending into hopelessness, he said, the very wealthy should be asked to share a sacrifice that thus far has been confined to the poor and the middle class.
Buffett challenged those who say higher taxes would harm job creation, pointing out that between 1980 and 2000, when taxes were far higher, the number of jobs created was nearly 40 million. He also noted that during 60 years of working with investors he had yet to see anyone—even during 1976-77, when capital gains tax rates were 39.9%—“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.”
Buffett stated that he knows many of the mega-rich well, adding, “by and large, they are very decent people.” He pointed out that many have joined his Giving Pledge, promising to contribute most of their wealth to philanthropy. “Most,” he added, “wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.”
The supercommittee, he suggested, should leave tax rates alone for the majority of taxpayers, as well as continuing the employee payroll tax reduction. However, he said the rich should be treated differently, with those earning over $1 million being subject to tax increases—“including, of course, dividends and capital gains”—and those who make $10 million or more having an even higher rate.
“My friends and I have been coddled long enough by a billionaire-friendly Congress,” Buffett concluded. “It’s time for our government to get serious about shared sacrifice.”