Billionaire investor Warren Buffett argued in a Monday New York Times op-ed for increasing taxes on those making over $500,000 and enacting an alternative minimum tax of 30% on those making between $1 million and $10 million and 35% on those making above $10 million.
“I support President Obama’s proposal to eliminate the Bush tax cuts for high-income taxpayers,” Buffett said. “However, I prefer a cutoff point somewhat above $250,000 — maybe $500,000 or so.”
Buffett also wrote:
Additionally, we need Congress, right now, to enact a minimum tax on high incomes. I would suggest 30 percent of taxable income between $1 million and $10 million, and 35 percent on amounts above that. A plain and simple rule like that will block the efforts of lobbyists, lawyers and contribution-hungry legislators to keep the ultrarich paying rates well below those incurred by people with income just a tiny fraction of ours. Only a minimum tax on very high incomes will prevent the stated tax rate from being eviscerated by these warriors for the wealthy.
Buffett also said the “carried interest” deduction needed to be eliminated and that such complexities cannot get in the way of letting “those who want to protect the privileged get away with insisting that we do nothing until we can do everything.”
“Our government’s goal should be to bring in revenues of 18.5 percent of G.D.P. and spend about 21 percent of G.D.P. — levels that have been attained over extended periods in the past and can clearly be reached again,” Buffett wrote. “As the math makes clear, this won’t stem our budget deficits; in fact, it will continue them.”
Buffett also claimed “never did anyone mention taxes as a reason to forgo an investment opportunity that I offered.”
Buffett writes that “between 1951 and 1954, when the capital gains rate was 25 percent and marginal rates on dividends reached 91 percent in extreme cases,” he sold securities and did pretty well, while the “middle class and the rich gained alike.”
“So let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if — gasp — capital gains rates and ordinary income rates are increased,” Buffett wrote. “The ultrarich, including me, will forever pursue investment opportunities.”
Those like Buffett, who have benefited from crony capitalistic deals from the Obama administration, have lawyers and resources to forever go around the tax laws. That is why he can even bring up eras in which the tax rates were even more confiscatory to prove that those like him did fine. And while the “ultrarich” like him may “forever pursue investment opportunities,” raising tax rates not only disincentivizes people to take risks and invest, but it also makes it more difficult for the newly-rich to maintain and grow their wealth while investing and creating more opportunities and jobs.