I know part of the reason I'm so charmed by Warren Buffett is that I grew up in Omaha. My folks even had the chance to invest in Berkshire Hathaway in the early days, but the initial required stake of $10,000 was too rich for the blood of a young lawyer and his wife with four kids to raise. In any case, Mr. Buffett has always seemed to me the best of the midwest: straightforward, smart, honest; a simple, trustworthy man with an uncomplicated sense of fair play.
Just yesterday I read a New York Times Op-Ed piece he wrote last summer, where he encourages the government to stop "coddling" the super-rich. He points out that he and most of his "mega-rich" friends get enormous tax breaks, noting that most of them pay a much lower percentage of their income in taxes than do the merely wealthy, and even less, as a percentage, than many middle-class Americans. Buffett uses himself as an example of this inequity, stating that in 2010 he paid "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."
I love that he's appalled by this, and says clearly that it should change. Here's his proposal:
I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.
But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.
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.
Buffett has recently provided more specifics about his ideas, but the core ideas he expressed above haven't changed. The point is: he and his peers could pay millions more in taxes with no impact on their daily lives at all - while the additional $900 per year pocketed by a household making the median US income of around $48,000 as a result of the 2% decrease in the employee contribution to payroll taxes is truly meaningful. As the income gap between the richest and the poorest Americans continues to widen, we need to look for ways to help ensure our institutions - especially our government - isn't reinforcing this inequality. Congress can blather on all it wants about how much it cares about the difficulties faced by middle-class Americans; the rhetoric means nothing. How about enacting something like Buffett's proposal, to ensure those who can best afford it actually do pay their fair share?
