Warren Buffett assails Grover Norquist on taxes
The wealthy investor slams the anti-tax lobby, calling for higher rates on the rich.
How does Warren Buffett get back into fighting shape the Sunday after Thanksgiving? By using the New York Times' op-ed page to crack conservative lobbyist Grover Norquist square in the jaw.
With the fiscal cliff on the horizon and the entire political and financial ecosystem scrambling to find a solution, it's a bad time to be an anti-tax zealot. Buffett called out the tax-averse Norquist by name in his Times op-ed piece Sunday as he pressed for a 30% tax rate on those making between $1 million and $10 million a year and a 35% rate for those making $10 million or more.
Dismissing the notion that well-heeled investors would stop investing because there's a greater tax liability for their gains, the Berkshire Hathaway (BRK.A) chief executive is looking for a tax rate exceeding President Barack Obama's proposed "Buffett Rule." That plan would impose a minimum 30% rate on those making $1 million or more a year, but does little to tax capital gains or carried interest. Those don't qualify as ordinary income and are taxed at a far lower rate that favors wealthy taxpayers.
How does Buffett justify the hike? By noting the far more extreme levies he once paid as a wealthy investor. During the 1950s and 1960s, he was taxed between 70% and 90% on dividends and between 25% and 27.5% on capital gains. By 1992, he notes that the tax paid by the 400 highest incomes in America dropped to 26.4% percent of adjusted gross income. By 2009, it was down to 19.9% on a group that made an average of $202 million a year -- or $97,000 per hour for a 40-hour work week. Half paid less than 20% and a quarter paid less than 15%.
Even once-fervent supporters of Norquist's Americans for Tax Reform are coming around to Buffett's line of thinking. Before the November elections, Norquist got 238 out of 242 Republicans in the House of Representatives and 41 out of 47 GOP senators to sign his "Taxpayer Protection Pledge" vowing to "oppose any and all efforts to increase the marginal income tax rate for individuals and business; and to oppose any net reduction or elimination of deductions and credits."
The elections dropped the number of GOP pledge signers in the House to fewer than 220, while the Senate saw its ranks of GOP tax hawks cut from 41 to 39. Georgia Senator Saxby Chambliss signed Norquist's pledge nearly two decades ago, but says the fiscal cliff has made him shy away from that stance.
"I care more about my country than I do about a 20-year-old pledge," he told the Macon, Ga., television station WMAZ on Wednesday. "If we do it (Norquist's) way then we'll continue in debt and I just have a disagreement with him about that."
GOP Sen. Lindsey Graham from South Carolina and Republican Congressman Peter King from New York had Chambliss' back, taking to the morning shows on Sunday to express their support for changing the current tax structure. Buffett, meanwhile, doesn't want these converts to just dither around with the tax code while more money flies out the door. He wants to see changes implemented immediately so "carried interest" stops converting labor income to capital gains and offshore tax shelters stop making it easy to duck payments.
His targets are revenues at 18.5% of gross domestic product and spending at 21% of GDP. Considering revenues are 15.5% of GDP now, while spending is still at 22.4%, there's still a lot of sacrifice to be made at both ends of the spectrum. CNBC's Robert Frank suggest that it's not just the rich who could stand to pay more taxes, as deductions drop the rate paid by folks making $30,000 to $100,000 to between 4.8% and 7.7% -- or far less than their standard rate.
True, but Buffett's continued line of argument is that those in the upper echelons can spare a little extra far more than the folks in the middle income brackets. As incentive to implement changes more quickly and assuage the fears of taxpayers below the "Buffett Rule" threshold, Buffett further suggests ending President George W. Bush's tax cuts for high-wage earners. The not-so-minor caveat would be changing the cutoff from an almost upper-middle-class household income of $250,000 a year to an unquestionably rich $500,000 a year.
Buffett's been talking about this for a while, but this past week has offered the first signs that people in Washington on both sides of the aisle are listening. Let's see who else let Buffett's ideas digest over the holiday weekend.
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Very Good Active,.....Yes they always want to take it out on the 47%...
I believe the Election spoke mulititudes.....As it will again in 2014.
delmar, your assertion that there exists "people not paying anything towards their own country" is simply nonsensical, false and/or ignorant. the fact that mirage shares your viewpoint means that they do indeed walk among us. here are the facts:
1. the poorest of the poor pay sales tax at 7-10 percent, and a variety of excise taxes on phone/alcohol/cigarettes/gas.
2. the working poor and remainder of the 47% (many of whom vote republican) pay 7.65 percent as FICA tax (MR and SS) on earned income, then most are urban dwellers and pay 2-4 percent in local earned income tax. on top of the sales taxes and excise taxes.
3. the next level up in the 47% pay real estate taxes to support local government and school systems.
4. these taxpayers are left with zero (0) discretionary income after these taxes as the reminder goes to food, clothing, shelter, transportation. they spend all of their income which directly benefits the economy and all of these profits than flow to the top 53%
the "free ride" is taken by the top 2% who have enjoyed a tax welfare system for the past thirty years. i work with them day in and day out to subvert the tax system, shelter income, maximize deductions, and sock away huge amounts into trusts, offshore accounts, tax-deferred or tax-free retirement accounts and double-tax free muni bonds. the idea this extra income that is untaxed goes into small business investment is largely a myth perpetuated by many of these greedy leeches who feed off of those who work for a living and pay the dues that kill.
our national rates of charitable giving are paltry at best. most of the faithful give less than 3 percent to charity and those that actually tithe 10% (like myself) are very few and far between. we do hundreds of tax returns for this income group and i know.
wake up and smell the coffee - a mind (and a vote) is a terrible thing to waste ...
and GOD BLESS the newest AMERICAN HERO from Georgia - SENATOR SAXBY CHAMBLISS for agreeing to put America before the interests of his rich campaign contributors and the lobbyists.
don't get me started ....
Delmar....It's not just about taxing the Rich....The tax maize has to be changed or adjusted to a more workable solution...Yes the Rich are not going to make a huge dent, but will make a difference over a longer period of time...
I don't know about a "spending freeze"...SPENDING HAS TO BE CUT ALSO...
And offshore monies should be hunted down and taxed at a rate comparable to low dividend or maybe even interest rates...Capital gains are already very low AT THIS TIME FRAME.
That's part of the disgusting practice of the Elite...
Let's first get rid of the 15% max tax on the millionaires and billionaires hedge fund profiteers who bought the US congress to give them this incredible deal. You make 10-100 million salary or you make 10-100 million gaming the stock market, you pay the same rate.
Stop the Hostess hedge fund scams, You decide to buy a cash/pension rich company, you get a JP or GS or bank to back you on paper. You raid the cash and pension millions, load up the business with debt to keep running for a while, go bankrupt, put thousands out of work, put unemployment payment millions burden on states, have US taxpayers through federal law, take up paying the unfunded pensions, sell or license brand names for tens of millions and then pay only maybe 15% max tax or less if you structured it through another offshore deal. Sweet isn't it?
Thought for the day" Do you think now Romney will redo his 2011 taxes where he only took deduction for some of his charity deductions so that he could say he never paid less than 15% in taxes and now redo and get the other millions back?"
Citizens these rich perverts need to be blasted out of their seats, they are there doing nothing while the american citizens are hungry. We need to get these worthless removed. We have these Tea Party in the House of Representatives because worthless opportunist like Palin and her promotion of these low class members. They are back because of some Republican control States voted to bring some of these Tea Party back to oppose Obama, while hurting all our citizens jobs and progress. This need to stop, next time make sure these rich pile of junk will not return to destroy America while they enjoy big pay, and 10 months vacation a year!
We are awaiting impatiently the coming Fiscal Cliff confrontation with the President versus the House of Representatives. It’s imperative the rich pay a little more money in tax to improve our economy, and to help pay our Fiscal Debt. The people want now for The House of Representatives to make America a better place to live, to pay our Nation Bills to correct the deficit! And then, of course! President Obama, may needs to get ready to clip for last time, Boehner wings. We think, one way or another, Boehner, Ryan, Cantor will return to the old times tricks of bartering one goods for another, like many times before, but we the people aren’t going to be the losers this time, all that past abuse was very humiliating to our citizens, you, and all your followers Tea Party and Republican Members in the House, so many members with poor conscience, and careless for the future of our country. You, and the full House members have obstructed the President too much, too many times, much too far! Boehner, keep playing hero is telling the president how to fix the economy. Listen you all, one more time it’s getting old, and we, all of us, millions of us, are waiting impatiently for the fairness created by our president with this new Congress. We are here, all of us, late at night, awaiting in front of our TV sets, the final results of the efforts from yours/our president Obama, to dismantled the infernal machine of your House of Representatives budget locks, and he will cut your engines power, with all of you aboard members, all of you have a good live with millions, you’re all rich, but the country is very poor, you have grown with the dollars provided by the sweat and work from our backs. You all have purposely with you apathy for the needs of our nation hunger induced by you all, a systemic cruel land of no jobs for the American people. You all Tea party and Republican members are the abusers, continuous negation to work for the people, by the people, and only for the people, and in 2014, we will let all of you feel the powerful winds of anger from all the guts of the millions American citizens that will not take it again from you, or anyone like you! We have too much hunger in our country, and you need to help now!
Taxing the rich will benefit our deficit for a few days. We need a spending freeze. We may have to go cold turkey, but we need to get our spending under control Why not just let the Cliff come and what happens, happens???
There isn't anyone that can't agree we can and should be taxed by the Gov'ts, both State and Federal, but what people are offended by is the amount of people not paying anything towards their own country.
They are along for the free ride. That has to stop. We as a nation are already good Samaritans, but to help those that can help themselves is a travesty against the rest of us.
Quit being jealous, Mirage....Cut loose with some of those bucks...
Sounds like Buffet is ready?
And don't come back with, that you are not jealous; That would be absurd..
Yup....I can agree along with just about anything Warren says about the subject...
Most Americans should.
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