Tuesday, August 16, 2011

Warren E. Buffett Is An Idiot

He must be, because the Republican response to his call for higher taxes on the wealthy reduces him to a know-nothing Midwestern rube. Here is one of the most fantastically wealthy, pragmatic, conservative, sensible business people on the planet, but when he challenges the Tea Party orthodoxy (a redundancy,  I know) he might as well be an ice cube sales rep in Anchorage.

What's all the fuss? Yesterday in the New York Times, Buffett called for a higher tax bracket on those people who are making more than $1 million dollars per year. Here's the piece To quote:

"I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.
But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate." 

He points out that his tax rate for 2010 was 17% of his income, far less than the other people who work in his office and, I'm assuming, far less than the 27% or 36% that most of us pay on our last dollar of income. He continues:

"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." (my emphasis)

According to the Joint Committee on Taxation, The Congressional Budget Office (which is non-partisan) and The U.S. Treasury, Buffett's reforms could bring in as much as $500 billion dollars over the next 10 years. That's about one-third of what Congress will be trying to cut during negotiations this fall.

But Republicans will have none of it. CNN's Pat Buchanan thinks that Buffett has a secret plan to raise middle class taxes, which is nowhere to be found in Buffett's column.

Texas Republican Representative  and member of the House Ways and Means Committee (which has jurisdiction over raising money) Kevin Brady, takes the Tea Party's ignorance factor to new heights. He says, "This is not a serious solution for deficit control or getting this dismal recovery on its feet. Economic growth does not follow a tax increase."

How do people like Brady get elected?

This is most certainly a serious solution for raising money so we can spare some of the devastating program cuts the Republicans have proposed. And economic growth following a tax increase? I guess Representative Brady was out of the country during the boom of the 1990s which occurred, thank you very much, after both Presidents George H.W. Bush and Bill Clinton signed tax hikes to help a faltering economy.

 August is not called the silly season for nothing.

1 comment:

  1. On the nose Bob.
    If our nation and our society wants to avoid the upheavals we've seen in London and throughout England, we must analyze the "why". We must not take money away from the educational system. Conversely, we need to assure every college student in the country who can maintain a "B" average a fully funded education. They will be the seed for our future business and social care world. The Christies, Bachmanns, Bohners are the eaters of the seed for our future crop.
    Tax those who can afford to be taxed and benefit the most from a free society where they are able to make more money than they will ever be able to spend. If our society doesn't wake up soon the cry of ,"Eat the rich and live in their houses and use their health care" will echo through the land.