“lower tax rates and far lower job creation”

A lot of people linked to Buffett’s column last week. If you haven’t read the whole thing, you should. Buffett is a National Treasure, in marked contrast to those who sneer ‘he should feel free to send a check to the Feds.’ The tight-fisted cheapskates call the shots these days. The notion of a Commonwealth is dying. Even the Founders saw the rightness of progressive taxes and the wealthy paying more because they can. The Rich use the common resources of the nation and often disproportionately. Let them pay more for the good of the nation. The cheap bastards sneer the lazy poor want a free ride – not so.

Stop Coddling the Super-Rich – NYTimes.com

By WARREN E. BUFFETT

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.

Stop Coddling the Super-Rich – NYTimes.com

Facebook Comments