Tax rates paid by some high-income Americans are an “outrage,” Warren Buffett said in an opinion article he wrote for Monday's New York Times. He called on Congress “right now” to set minimum rates of 30 percent on annual income between $1 million and $10 million and 35 percent above that.
Enacting “plain and simple” minimum tax rates would block “warriors for the wealthy” — lobbyists, lawyers and “contribution-hungry legislators” from keeping rates unfairly low, Buffett wrote. He added that federal spending also should be curbed and other tax problems fixed to keep the economy healthy.
He said he supports President Barack Obama's call for eliminating Bush-era tax cuts for high-income people but suggested the cuts be dropped for people with incomes higher than about $500,000 a year, rather than the $250,000 backed by Obama.
Buffett, the chairman and CEO of Berkshire Hathaway Inc. of Omaha, wrote in the Times two years ago that he and other wealthy Americans should pay tax rates at least as high as middle-income Americans, even if much of their income comes from investments now taxed at lower rates.
His latest Times article comes as Congress is trying to avoid the “fiscal cliff” of tax increases and spending cuts that will take effect Jan. 1 unless Congress acts.
In the article, Buffett wrote that wealthy investors don't reject job-creating business proposals because of tax rates, an argument raised by anti-tax crusader Grover Norquist and others. “Only in Grover Norquist's imagination does such a response exist.”
Buffett said tax rates on investment profits were higher when he managed people's money in the 1950s and 1960s. “Never did anyone mention taxes as a reason to forgo an investment opportunity that I offered. ... The ultra-rich, including me, will forever pursue investment opportunities.”
Wealthy people are getting wealthier in part because of the tax code, he said. Combined federal income and payroll tax rates for people with the 400 highest incomes in the nation fell from an average of 26.4 percent in 1992 to 19.9 percent in 2009, he said.
With 2009 incomes averaging $202 million each, he wrote, half of the 400 people paid less than 20 percent, one-fourth paid less than 15 percent and “a few actually paid nothing.”
Other tax issues also should be addressed, he wrote, but Congress should not try to resolve all tax and spending questions before tackling rates for the wealthy. “We can't let those who want to protect the privileged get away with insisting that we do nothing until we can do everything.”
The other tax inequities include low tax rates for “carried income” received by some money managers and laws that let wealthy people avoid taxes through a “Cayman Islands mail drop,” which Buffett called “sickening.”
Buffett wrote that the federal debt would be “stable” in relation to the economy with revenue of 18.5 percent of gross domestic product and spending of about 21 percent. Currently, revenue totals 15.5 percent and spending 22.4 percent.
“Correcting our course will require major concessions by both Republicans and Democrats,” Buffett wrote.
The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.
Contact the writer: 402-444-1080, email@example.com; twitter.com/buffettOWH; http://twitter.com/buffettOWH