“Only in Grover Norquist’s imagination does such a response exist.”
Those are the words of billionaire investor Warren Buffett, who delivered a biting dismissal of the argument that higher taxes on what he calls “the ultra-rich” will hamper investment, and thus the economic rebound. Norquist, of course, has famously had Republican lawmakers sign a firm “no-tax” plan lest they run afoul of his powerful lobbying group, American for Tax Reform.
The “Oracle of Omaha” employed snark and sarcasm in an op-ed in The New York Times on Sunday to illustrate investor behavior during past high-tax periods, and argues investors still invest, no matter the effective or marginal rates on dividends and capital gains.
“Between 1951 and 1954, when the capital gains rate was 25% and marginal rates on dividends reached 91% in extreme cases, I sold securities and did pretty well,” Buffet writes. “In the years from 1956 to 1969, the top marginal rate fell modestly, but was still a lofty 70%–and the tax rate on capital gains inched up to 27.5%. I was managing funds for investors then. Never did anyone mention taxes as a reason to forgo an investment opportunity that I offered.”
Despite the “burdensome rates,” Buffett notes that both employment and the gross domestic product increased at a rapid clip. The middle class and the rich alike gained ground.
“So let’s forget about the rich and ultra-rich going on strike and stuffing their ample funds under their mattresses if–gasp–capital gains rates and ordinary income rates are increased. The ultra-rich, including me, will forever pursue investment opportunities.”