Warren calls it like it is

August 25th, 2011


On the 14th of August Warren Buffet called for the re-evaluation of the tax rates for the mega rich in a guest column for the New York Times. When one of America’s wealthiest citizen calls for an increase on his own tax, people take notice. As the primary shareholder in Berkshire Hathaway Inc., an investment and holding company, Mr. Buffett is a wildly successful investor. For many Mr. Buffett is the icon of wealth. His sage insight, based on sound business practices, has earned him respect and adulation. The companies Berkshire Hathaway invests in are part of our national economic engine. Spanning GEICO Insurance to Dairy Queen restaurants to Benjamin Moore Paints to MidAmerican Energy, Berkshire Hathaway serves the American public. It’s fair to say that most Americans in some form or another have contributed to Mr. Buffett’s wealth.
This summer, during the debt ceiling showdown, a group of inflexible ideologues held the middle class hostage to preserve tax code benefitting the ultra wealthy. After the subsequent downgrading of our national credit rating it is refreshing to learn that one of the most public figures in wealth is calling on some form of revenue enhancement to keep our government solvent.

 


Mr. Buffett noted that the poor and middle class have offered the most, as it is their sons and daughters who have been serving in the Iraq and Afghanistan wars. Yet when shared sacrifice comes to the mega rich, Congress has showered the billionaires with extraordinary tax breaks. Mr. Buffett wrote:
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.

 

 

This 16-year snap shot shows how the lower tax rate and higher earnings have fueled the national income gap.Hailing from Omaha, Nebraska Mr. Buffett is by the standards of his class a frugal man. He has never filed for bankruptcy, does not invest in gambling and gives back to the community that has allowed him to flourish. He lives a no nonsense life and has pledged to give away 99 % of his wealth. By all appearances he is a happy man, his joy not tied to the accumulation of material wealth. When he applies his critical eye to the business and financial health of our nation and raises concern, the financial world takes listens.

 

 

If we are to attain a balanced budget the US government must eliminate waste and cut unneeded services while our elected representatives need to be realistic about revenue. The most fortunate in our society have benefited from the physical infrastructure and the transparent business practices of our nation to build massive stores of wealth. The opportunity to be one of the 400 wealthiest Americans is dream that motivates business people every morning. Capitalism is a vital part of the US business landscape and asking the top earners to pay a higher rate isn’t going to force the nation into socialism nor will it send any of the wealthiest to welfare. As Oracle of Omaha said himself:

 

My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.



Posted in Daily Chronicle
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