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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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.
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.
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!
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!
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.
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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