by Max Brantley
Billionaire Warren Buffett laments, again, in a New York Times op-ed how the rich don't share the sacrifices made by others in the U.S. He notes his effective tax rate of 17 percent is lower than that of many of the working people in his office on account of preferences for investment income. Candidates such as U.S. Rep. Tim Griffin believe — with election results to support them — that Americans support such a tax system.
Do higher tax rates discourage invesment? Buffett says no.
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.
Buffett notes the economy has declined while the tax rate has declined for the nation's wealthiest people. His solution: He'd support reductions in future promises, presumably a reference to Social Security and Medicare programs. But also he has ideas on taxes. For most, no change. And he'd continue the payroll tax reduction for its stimulative effect.
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.
My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.