Warren Buffett's Call: Tax Wealth for the Common Good

Warren Buffett is calling. We need more wealthy folks like him to speak up for taxing the wealthy.

Billionaire super-investor Warren Buffett has done it again. The Oracle of Omaha has made a bold and revealing statement about "taxing the wealthy." In his op-ed in Monday's The New York Times, Buffett wrote, "While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks."

Buffett revealed that his own effective tax rate -- the percentage of his income that he actually pays -- is far below his co-workers, thanks to how investment income is taxed at lower rates. Buffett pays an effective rate of 17.4 percent, whereas most middle and upper income individuals pay over 30 percent of their income. He revealed one of the dirty secrets of tax policy -- the privileged treatment of income from wealth over income from work and wages.

We now need ten thousand more like Warren Buffett to speak up, people with incomes over $250,000 that know in their hearts that they should pay more.

Of course, we need an engaged public -- people in the bottom 98 percent -- to mobilize and press for tax increases on the wealthy before any further budget cuts. But enlisting the voices of wealthy people for the common good is a key part of the strategy to change the political dynamics.

The good news is there are already several thousand who have stepped forward and spoken up. Several hundred business leaders and wealthy individuals have joined Patriotic Millionaires for Fiscal Strength, a joint initiative of the Agenda Project and Wealth for the Common Good. On June 7, the tenth anniversary of the Bush Tax Cuts for the wealthy, they issued a powerful video calling on Congress to let the tax cuts expire.

These folks, in the top 2 percent of income and wealth holders, eloquently make the case that they have benefited from the generations of public investments that made their wealth possible. They celebrate the fertile soil we have created together in U.S. society for business and wealth creation and believe they have an obligation to future generations to pay their taxes so that others have the same opportunity.

Almost 500 high-income taxpayers support the Fairness in Taxation Act, that would increase top tax rates on millionaires, generating an additional $78 billion in urgently needed revenue. This legislation would also tax both capital gains and wage income over $1 million at the same rates. It would eliminate the "carried interest" loophole that enables billionaire hedge fund managers to have their income taxed at a low 15 percent. This legislation would eliminate the economic distortions that come from taxing income from work at twice the rate as income from wealth and investments.

There are now thousands of business leaders and wealthy investors calling on Congress to stop aggressive tax corporate dodging. They point out that it is bad for business when companies like General Electric and Verizon pay no taxes -- and force patriotic domestic companies to compete on an unlevel playing field.

In early July, Senator Carl Levin reintroduced the Stop Tax Haven Abuse Act. At a press conference Senator Levin was joined by spokespeople from Business for Shared Prosperity and the Business and Investors Against Tax Haven Abuse campaign. Rep. Lloyd Doggett introduced a version in the House.

Polls show that the public supports raising taxes on millionaires and closing offshore corporate tax shelters as part of getting our fiscal house in order. Yet the Tea Party Republicans have pledged to destroy the economy before raising taxes on their rich patrons. The bottom 98 percent needs to get organized -- in mobilizations like the "Other 98 Percent" -- to press for tax fairness. But it will enormously help the cause to have more of those who will pay these taxes step forward and speak up.

In our organizing work at Wealth for the Common Good, we share Warren Buffett's view that many of the rich "love America and appreciate the opportunity this country has given them... Most wouldn't mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering."

Polls show that wealthy people know the tax code is getting less fair and is out of balance. But many of them -- like the population as a whole -- don't feel the intensity about tax fairness that they feel about other pressing matters such as education, children's health, and ecological degradation. Very few people of any economic class feel passionately about tax fairness -- to the point where we are politically engaged.

Now is the time for all of us to understand how important this tax debate is -- and that everything we care about is under attack by the current drift in politics. We have to get real fired up about tax fairness.

Revenue must be on the table as part of debt and budget debates in the coming months. Congress must let the Bush tax breaks for the wealthy expire, increase top tax rates for millionaires, and eliminate aggressive corporate tax dodging.

Right now, our silence is consent to the status quo of budget cuts and unequal sacrifice. We need millions of ordinary citizens to speak up. And to compliment this, we need tens of thousands of our nation's business leaders and wealthy individuals to speak out.

The alternative is austerity for everyone but the rich -- and a growing economic apartheid in America.

 

Follow Chuck Collins on Twitter: www.twitter.com/wealthforgood

Comments

[jesternhell]

11:37 AM on 08/19/2011

lets talk to his employees and see if they want him to write a bigger check or give them pay raises, pay for better health insurance, and add more people on the job.

[bob2076]

11:33 PM on 08/17/2011

Since Warren Buffett says he only paid 17.4% in fed taxes and wants to pay more why didn't he direct his accountant to make sure he paid the top marginal rate of 35%. He could have done this and came out and said, I could have paid 17.4% in fed taxes but I choose to pay the top marginal rate of 35%. How about leading by example?

[wgaip]

09:43 PM on 08/16/2011

Is this guy for real. How shallow can this guy be. Anyone can pay more in taxes if they so choose. If he feels he is not paying his fare share then by all means send a check to the tax man. To see if he is sincere why doesn't he show us some cancelled checks from years past when he wasn't paying his fare share. No one has to be forced to pay extra. What is wrong is for others to tell others to pay more and then not pay more themselves. So all you liberals out there that are calling for higher taxes on the middle class (because that is who really pays the bills) pay your fare share. Send the government your money and leave me alone.

[kathyaj]

01:44 AM on 08/19/2011

Warren Buffett is the third richest man in the world yet he lives so modestly you'd think he's a middle class citizen if you met him on the streets or drove by his house. He lives in the same house he bought for $31500. http://www.zimbio.com/pictures/kwze6btvQoc/Warren+Buffett+s+Home/OORUPHFpzfg The car in his driveway is a run-of-the-mill four door. He gives an astronomical amount directly to charities and to entitlement programs the government is cutting costs from. As far as paying a higher tax rate, he pays what he owes. Have you ever tried to pay more taxes? You can't do it. You can't even pay the marginal tax rate, as the law always reduces it to the average tax amount. Try it. The IRS will send your check back. The IRS will write you a letter saying you made a mistake on your tax return, and reimburse you for the overpayment. Warren Buffett is a great man, a kind, compassionate, as honest a citizen as you're going to find man. Go ahead and ask him for those receipts. Go ahead, I'm sure he'd send them to you 'cause that's how he is. That man is a male Mother Teresa.

[Christopher Koulouris]

07:14 PM on 08/16/2011

As heroic as this all sounds, and with the electoral system entrenched in cash lobbying, making a stand to raise taxes is only going to come back and haunt those politicians who's business it has become out of necessity to cater the wealthy, after all they are the ones best able to give to their campaign funds. Isn't that the gut of the problem and why we keep apeasing the well off- just to make sure they send their caretakers in congress another check so they can lobby for another election campaign?

http://scallywagandvagabond.com/2011/08/sanity-at-last-warren-buffett-insists-that-congress-raise-taxes-on-rich-americans/

[David Engage America]

05:03 PM on 08/16/2011

It is important to notice that the article talks about raising taxes on the top 2% of income earners which is very close to the $1 million income level that Buffett wants to raise taxes on. This is in stark contrast to the families making $250,000 that the administration wants to raise taxes on. The big difference between these two groups is that people making over $1 million are the “real rich” while people making $250,000 are simply “well-off”..

The reason the administration chose $250,000 as the cut off for being rich is that it invoked the tax levels during Clinton’s period of economic prosperity in the 90s. The problem with using these rates is that they were not adjusted for inflation. When adjusted, $250,000 in 1993 is actually about $386,000 in 2011. http://eng.am/qsbKe6

No one is arguing that families with income over $250,000 are struggling. However, they are not living a life of luxury like the millionaires that Buffett suggests raising taxes on.

[campyfan]

03:04 PM on 08/16/2011

Remember people that 78 billion might sound like a lot of money but it represents about 2% of the budget. This is not a solution to the problem, nor even a substantial part of a solution. When reading numbers keep in mind these two: Current deficit spending is 41% of the budget, current deficit spending is approximately 3.5 billion PER DAY.

[Javalation]

04:08 PM on 08/16/2011

It should be included as part of the solution?

[AndrewHuff]

12:21 PM on 08/16/2011

True conservatives and patriots understand the need for higher taxes to pay off the national debt.

[violettefemme]

12:43 PM on 08/16/2011

No---to run the country. To provide for the citizenry that which commerce can not. Not to pay down debt.

[AndrewHuff]

02:15 PM on 08/16/2011

The debt came from running the country in the past.

[AndrewHuff]

03:00 PM on 08/16/2011

Let me try again,

You can pay off the debt through higher taxes or lower spending.

You can keep the debt and pay interest forever.

or you can default on the debt.

I'm advocating paying it off through higher taxes.

What do you recommend?

You 2:32 post sounds like you want to tax "corporatio­ns and billionair­es in a fair and progressiv­e way.", and perhaps stop the 3 wars.

If so, we agree.

[jhNY]

12:13 PM on 08/16/2011

No matter how many zillionaires call for the raising of taxes on themselves, and folks like themselves, the Republicans will save them from themselves.

[bob2076]

01:06 AM on 08/18/2011

This liberal argument is totally off base. If you taxed the rich more it will NOT, I repeat NOT pay off the national debt. It will make a very small dent. Liberals don't understand it the SPENDING stupid.

[jhNY]

11:53 AM on 08/18/2011

No, Bob. You're wrong and simplistic and hostile. TP three-for-three.