warren buffett
the billionaire tycoon
writes an op ed stop coddling the super-rich
our leaders and ask for shared sacrifice but when did they
when they do it when did they do the asking
past they spared me i'd checked with my mega rich friends to learn what pain
they were expecting them to or left untouched
some of us are investment managers who earned billions from our daily labors
but are allowed to classify our income is carried interest
thereby getting a bargain fifteen percent tax rate
others on stock index futures
for ten minutes and have a sixty percent on their game taxed at fifteen percent
and if they had been law as if they had been long-term investors
you understand
that these uh... tycoons who make their money through finance
they don't pay
regular income tax
they're not subject id to the uh... reduced tax rate of the bush era
thirty two percent on their income no date they pay fifteen percent
cuz its capital gains because
what they had to do was actually press a button and buy something
and then sela ten minutes later
they deserve eight
even bigger tax break
than bush gave them
if they were actually working
last year he writes my federal tax bill
the income tax i paid
as well as payroll taxes paid by me on my behalf
you know he's a billionaire but only the first hundred thousand dollars
of his uh... annual income is taxed
by soc purity
infy ca
his tax bill was nearly seven million dollars that sounds like a lot of money
but what i paid was only seventeen point four percent
of my taxable income and that's actually a lower percentage that was paid by any
of the twenty two other people who work in our office
their tax burdens rain from thirty three percent two forty one percent an average
thirty six percent because they pay federal income tax
on what they make
and they pay
six-point
three four percent
on their as payroll tax
and of course because they're not making
millions of dollars
it's a higher percentage
last year eighty percent of these revenues
that came into the government
came uh... from personal income taxes and payroll taxes
the mega rich pay income taxes at a rate of fifteen percent on most of their
earnings but pay practically nothing
in payroll tax
relative again as a percentage of their income
it's a different story for the bill class they fall into the fifteen and
twenty five percent income tax brackets
and then they're hit with heavy payroll taxes to boot
i've worked with sixty investors for sixty years
and this is wary he actually addresses the notion
that libertarians fantasize about going galt and the laffer curve and if you tax
people too much they're not gonna wanna make any more money
i have worked with investors for sixty years and have yet to see anyone
not even one capital-gains rates were thirty nine point nine percent in
nineteen seventy six
remember their fifteen percent today
shy away from a sensible investment because of the tax rate on the potential
gained people invest to make money and potential taxes have never scared them
off no one's gonna say i'm not going to invest in this
and press this button to buy a piece of paper
with a fifty or sixty percent return if that's subject to twenty eight or thirty
two percent or forty percent tax
my little finger would get tired if i have to pay a higher tax rate
in nineteen ninety two he writes the top four hundred
income earners in the country had aggregate taxable income of sixteen
point
nine
billion dollars
and paid federal taxes
of twenty nine
percent on that some in two thousand eight
the aggregate income of the highest four hundred
had soared to nine d
point nine
billion
ninety point nine billion
from sixteen point nine billion
a staggering two hundred and twenty seven point four million on average
but the rate paid had fallen to twenty one point five percent
so by any measure
they're paying eight percent
less taxes effective tax rate
on the millions they're making and remember as you have the incoming
concentration
move up the scale
less money is actually captured by the payroll tax
which is why we're seeing an
issues it with
social security
not being able to pay its own way after twenty thirty seven
job one though however he writes
for these twelve plutocrats on this committees to pare down some future
promises
that even a rich america can fulfill in other words
let's cut some soc k ready and uh... medicare
but my friends and i have been coddled long enough by a billionaire friendly
congress it's time for our government get serious about shared sacrifice
let me tell you why
buffets numbers
make a compelling case
but it's frame is completely wrong
first off the idea of shared sacrifice implies that somehow this is a moral
obligation by people and that may be the case
but this isn't about sacrifice the reason why our economy
has had such stagnant wages for thirty years for middle-class americans
the reason why
we see underfunding in social security thirty years out
is because we had too much money concentrated
into few hands
economist call this excess capacity
and it is debilitating our economy
so forget fairness forget shared sacrifice
they have to much money
for society to function properly
this argument was made
back in seventeen eighty six by jefferson when he came to
big property barons holding too much property
and it's the same argument norell will be ni is making today about excess
capacity
and then the second thing that warm but forgets ron is this notion that we are
coddling are billionaires
as if congress just sort of likes them in treats them with kid gloves
freelotto reason then they're nice
we are not seeing
the coddling ever a billionaire's
we are seeing the billionaire s
gained so much money
that they have an inordinate amount of control
over our government
and because i have this control
they force policies that benefit them
this is not happenstance this is not an accident
this has been a long term project
by billionaires
and and millionaires in this country not all of them
to force policy decisions
that necessarily benefit them
and this is a zero sum game when you have policy decisions over the past
thirty years as they came out in a princeton study
that favor the rich
guess who the losers are
the other ninety eight percent ninety four percent however you wanna calculate
this
rest of americans
it so that's where warren buffett gets it wrong and maybe you can say this
maybe it's enough for him to say
just change the tax policy
and i will give up the ghost that we are running things in this country
despite the fact that were supposedly in a democracy
but that's the fact