August 15, 2011

One of the super-rich says "stop coddling super-rich."

The entire thing is worth reading (not long) but here are a few gems from Warren Buffet's great op-ed. First, for those who seem to not quite grasp how much money the rich have gained while workers and middle class people have seen their incomes and benefits stagnate.
"Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent."
Or for those who think that the rich already pay too much in taxes:
Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.
And this may be my favorite since we always hear that higher tax rates make rich people angry and make them decide to not invest their money. I have always found that a completely ridiculous argument, since their other option is to sit on their money. No rich person does that unless they are misers hiding their money in mattresses. They invest because it is in their interest to do so, regardless of the tax rate they pay on those returns.
Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn’t refuse, nor did others. 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.


Smitty said...

Sure, but he is a devil-worshipping liberal scumbag who is corrupt in every way.

As Bob pointed out over at our place, their arguments rely on "faith" and "belief," 2 words which spell certain death for any rational argument based in fact.

Natalie said...

Love this. Thanks for pointing it out. I was wondering where you had been, especially with the Iowa straw poll. Perhaps you were wiser than me and had unplugged!