Warren Buffett assails Grover Norquist on taxes

The wealthy investor slams the anti-tax lobby, calling for higher rates on the rich.

By Jason Notte Nov 26, 2012 3:00PM

Taxes copyright Thinkstock, SuperStockHow 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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189Comments
Nov 26, 2012 5:43PM
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Buffett is a complete idiot and last time I checked wasn't a prominent economist.   Why don't we ask the most revered so called reverend "Al sharpton" what he thinks?   Or why not ask Hillary Clinton?  Ask Trump or the Rockefellers what they think.    
Nov 26, 2012 5:40PM
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All this talk is worthless.  All we are doing is screwing away time when we could use it better.  Warren Buffett didn't get his money working an 8 hour shift at honest wages.  No other rich person did either.  Most got rich by swindling others.  Our govenment is a leader at  swindling people.  And, we deserve it because we put the crumbs back in office.  If America goes down, the faster the better!! If a major country invaded America, how many of you think anyone in Washington could be found.  Remember George, Jr. dove underground leaving an elementary class behind after 9-1-1.  He only surfaced and "boldy" went back to Washington after all the smoke cleared.  If we want change, it will most likely come in the streets.  Not what I want but a real possibility.  FEMA camps are already in place.
Nov 26, 2012 5:40PM
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Buffett is so close to death he just doesn't give a dam.  Please inform the old guy who is so out of touch with reality that he can give Obama all his fortunes voluntarily any day he wants to or shut the f... up.
Nov 26, 2012 5:38PM
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Since none of us are privy to what level corruption exists between Wall Street and the Federal Government, your header question is irrelevant. It should occur to all now that America is divided between Too-Rich-And-Not-Worth-It and the sum total remaining population forced to live poorly. The obvious is straight ahead... a war we don't need to have, a number of dead and wounded and America exposed to foreign threats. The game is up for the Kool Aid Addicts... go buy a Monopoly Game and play it to the death if you can't see the damage you've done to the rest of us. Go ahead and arm yourselves... history suggests you will hole yourselves up and go insane waiting for the door to burst open. Paranoia will overtake you long before we need to. Wake up, idiots and start doling out cash without rules or stipulations and restore the Chaos that makes America tick. You are mighty sick puppies. New World Order and a False Elitist Class are not in our future.
Nov 26, 2012 5:36PM
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Warren Buffet is very crafty. His purchasing of railroads to carry oil from the northern states to refineries in the south is reminiscent of Rockefeller. He will cry about taxes for Odumbo as much as he needs to as long as the "idiot" in charge stops the pipeline construction that would kill Buffets rail service contracts.
Nov 26, 2012 5:31PM
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Does anyone here really think Warren Buffett means that?  If so, I ask you two questions.  First, why do you think his secretary pays more in taxes than he does?   And, secondly, why does he not pay her more?  I could ask more questions but I won't.  I'll just wonder for myself why he doesn't pay the dividends to his stockholders.  I asked all to vote the incumbents out.  They didn't.  I don't care what happens to America now.  Yes, I said that right!!!  I don't care if China forecloses on us.  I"m old and won't be here long anyway.  I'm not worried about this country.  The idiots in Washington made me feel this way.
Nov 26, 2012 5:30PM
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Why not a fifty percent tax increase on all who voted democrat, they want to spend it , let them pay for it.
Nov 26, 2012 5:27PM
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Taxing the rich to the extent that we tax them is unfair. Let's say you are a corporation and pay tax on income and distribut tax to shareholders. That money has been taxed twice at 35% and at 15%, that's 50% tax. If you are an individual that same applies and you don't get away from it. If you make enough to be in that bracket then sooner or later you pay that amount. Then add state and/or local taxes on that as well. The rich already carry a larger than fair share of our national tax.

 

What to me seems unfair is that my two daughters get and EIC tax credit and even though they did not have to pay in tax they can get five or six thousand dollars back. That to me seems more unjust. Now believe me, I certainly don't want to see my daughters loose that revenue but I'm addressing 'fairness' and that is a completely distinct issue from can someone afford to pay. If your kid asks you to dinner and then expects you to pay because you can afford it most of us would get wise and not accept the invitation. That is what has happened in our country. The poor want what others have and want someone else to pay.

 

I'm not rich and I don't even approach the high middle class bracket but I make a good living now and have the student loans to show for it. I didn't get there for free and if I ever make the upper middle class level I earned it while someone else wants to take it. That's not fair.

Nov 26, 2012 5:20PM
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Too bad Buffet set all of his companies up to pay dividends and then limits his "salary" to $100,000.
Nov 26, 2012 5:17PM
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How did buffett get so rich when he is so stupid he has no common sense so far removed from the work a day life
Nov 26, 2012 5:12PM
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We need more people who think and act like Buffett.We have people who are just plain jeolous

of his success.Most people`s tax plan is for everyone but themselves to pay taxes.

Nov 26, 2012 5:12PM
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63% of DEMOCRATS IN CONGRESS ARE MILLIONAIRES! THEY AREN'T USING LOOPHOLES?
THEY AREN'T USING LOBBYIST TO MAKE MONEY? THEY AREN'T GETTING PAYOFFS?
THEY AREN'T GIVING PAYOFFS? ARE THEY USING OFF SHORE ACCTS? PLEASE YOU DUMB
LIBERAL DEMOS THINK RAISING TAXES IS THE ISSUE WHEN IT'S THE SOCIALIST LIBERAL
AGENDA! 47% OF AMERICANS ARE ON SOME KIND OF WELFARE! THE DEMOCRAT PLAN!
PELOSI AND BIDEN BOTH SAID 'UNEMPLOYMENT IS GOOD" ! WHY? THEY GET VOTES!

Nov 26, 2012 5:11PM
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The more I hear from that old fool Buffet, the more I think he has some brain disease called "STUPID".  As has already been pointed out we have a spending problem not an income problem.  Go to Forbes magazine list of the 400 richest (the richest is a Mexican).  Confiscate everything they have and make them homeless, sell everything and the money covers just a bit more than Obama is currently spending.  And Obamacare hasn't even been implemented to add to current spending.  The next year we have to find another bunch of rich people.  Remember we took everything last year and made that group penniless.  We may not have even got fair value for all their stuff because we no longer have the richest people.  We are down to the second string.  They have a whole bunch less and it is basically stuff not cash.  Remember that old story where They came for one group.  I was not one of them so I didn't care.  Then they came for another group.  I wasn't one of them so I didn't care.  Then they came for me.  There was no one left to care.  This bunch of Bovine Scatology about taxing only the rich is going to ultimately destroy everybody. (Originally the income tax in 1913 was only on the top 1%.  Sounds like the same old lie.) While were at the point of spending complaining, how about the President.  I understand that the flying around in Air Force One to get a Pizza in this place and then an Ice Cream over there and a Beer someplace else as well as a taste for Kobe Beef and entertaining all your personal friends is costing the taxpayers close to one and a half BILLION Dollars in one year. No other President has ever done that. The Monarchy in England doesn't even come close and that is a real King and Queen. In fact ALL the Monarchs of Europe don't come close either.  Oh, and this is all tax free to the Prez. Do that yourself and see what the IRS will have waiting for YOU. Remember early on in this administration that Hugo Chavez from Venezuela gave Obama a book about himself. Could this be where Obama got the idea that he could become the first DICTATOR of the U.S. Wake up America. You go to school get a degree in nothing that will make you employable, have a burden of debt that you want to go away and protest that somehow Wall Street is responsible for your plight,  only to find you are now a slave to the ones that fed you a line that you were too ignorant to recognize.  You deserve your pitiful fate that is slowly unfolding before your eyes and you are too dumb to recognize it.  Back to Buffet again.  He pines for the days when he paid 90% tax rates.  Kennedy had a recession to deal with and lowered tax rates to 70%.  Johnson refused to pay for his Vietnam war and screwed things up later for the Carter years.  Reagan lowered the rates to 28% and the economy took off in August of 1982 never to go back to the Dow being around 650.  Now you have an individual in the White House that went to Lawyer School saying that raising taxes will make everything work out ok.  Buffet would never had been successful with rates at 90%.  Now that he has his fat bankbook, he doesn't care if anyone else can be as successful.  Buffet has got to have some sort of brain disease to not see what is going to happen. (Maybe he just don't care.)  Why doesn't Buffet layoff his tax lawyers and pay what the IRS says he owes.  He is one feeble minded fool that doesn't maintain consistency.  Hey, Warren, why don't you bust up Berkshire and pay the capital gains taxes that you refuse to owe and help balance the budget that you expect the rest of the country to pay for you.   Treasury has a way for you to donate more money to the IRS. Then we won't have to listen to you whine that your Secretary is paying too much because you refuse to pay what you actually owe.
Nov 26, 2012 5:10PM
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Who would you trust with your money - Norquist or Buffet?
Nov 26, 2012 5:09PM
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The rich has NEVER paid their fair share! Thats one of the reasons were in this mess! CEO`s making or should i say TAKING way too much of company profits! Some even running the company out of business! We the poor and so called middle class are tapped out! All the money is in the hands of the crooks now and without them paying more we FALL!! What goes around comes around you Romneys of the world!!
Nov 26, 2012 5:08PM
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We the citizens need to deeply thank Warren Buffett for his persecution of the Grover Norquist propaganda and nasty filthy rich cause of no tax increase from the rich. The whole thing seems so absurd, so completely out of constructive feelings for the progress our country. The rich needs to make when a greater contribution, as it’s the work of the proletarians, the Joe, Mary, and Susan next door with his labor that help to put the millions in their pockets. They do need to fairly contribute to the economy, and to lower the deficit from the terrible past mistakes of the trillions of dollars wars expenses that drained our economy for so long from the presidential missteps of Bush! There are Bills signed by Obama to create jobs, but trashed and violated by the Tea Party and the Republicans in the House. These type of Tea Party guys in Congress is what we get when Sara Palin gets geared up to speak trash, and stupid people followed her to the guillotine, a total disaster and gargantuan economical block from progress sick Congress!

With the fiscal cliff quickly approaching and the entire political and financial institutions scrambling to find a solution, this worthless Congress better do go along to increase the tax on the privileged rich. We are tired of the lies. We know that the great president Ronald Regan, and Bill Clinton increased taxes on many different occasions of their presidency to foment the economy, but then, there were people with brains wanting to do their job, that is, work for the people, and not only to screw the citizens, and not to go to Congress to fill their filthy pockets with their rich friends political favors. Congress members with their millions, their lack of coming to work, their many months extended vacations at the tax payer expenses. You bunch of Congress pirates, you need to leave Congress. It’s unfortunately that many of you returned because many States with Republicans majority put you there! We are sure it was an intentional manipulation from the Republican, and the Tea Party to lock the Congress again if the case Obama wins the November 6, elections! It seems is working well you Republicans and Tea Party against the people of the USA!

Nov 26, 2012 5:07PM
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People, we need to urge Washington and more importantly people of all economic income levels to find a common ground not only to this tax issue, but to the mentality issue that is really dividing America.

We are too divided by the amount of money that is in our bank accounts.  Money is important, but it is not everything in life.  If you have much of it, awesome.  I'm sure you earned it.  Just don't think of yourself higher or better than a person who might not have as much.  If you don't have much of it, I'm sure you earned that position too.  Just don't think that because someone has it you should have it too.  What you reap is what you sow.  That is a common rule of life.

The most important things in life are health, family and the pursuit of Happiness.  Where your heart is that is where your treasure will be.  I can tell you, my heart is not focused on money, it is focused on my wife, 2 boys and baby girl.  I will give up my life for them without blinking an eye.  Money, although necessary to maintain, is truly secondary to me.  My family will always be 1st priority.  

You should take a moment to prioritize the most important things in your life.  If Money is higher than your family, you need to re-evaluate your priorities.  You will quickly realize that there are more important things in Life than a bank-full of Benjamins! :)
Nov 26, 2012 5:06PM
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Taxes is NOT the issue, Buffett is either too stupid or to senile to know that. Buffett was a great investor, but he should realize even if you tax the richest 2% of the population 100%, it still will not make a dent in the amount we owe until the government starts to cut back on spending.

 

Giving the federal government more money is like giving a drug addict more drugs and expecting that to change anything.

 

This country is toast because the majority of the people living in the country are scum. The smart ones better find another country to live in pretty fast.

Nov 26, 2012 5:02PM
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I don't care what Buffet says--the government will just find another way to make a loophole so that the rich can keep their riches--that's the communist way!!!
Nov 26, 2012 5:00PM
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White House warns 'fiscal cliff' may hurt consumer spending

 

$2200/yr on typical middle class next year........wooooooooo hoooooo

 

1.4 trillion/yr budget by this fraudualted "OH"bomination; 24 to 26 trillion debt by the time he leaves office!

his EPA department regulators are killing job's.......lost taxable income!

 

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