Billionaire Warren E. Buffett, the financial oracle of Omaha, Neb., has caused a political stir with his opinion piece in the New York Times calling for Washington to raise taxes on the super wealthy.
When it comes to super wealth, Buffett knows plenty, and the top brass inside the Beltway should listen.
"Our leaders have asked for &‘shared sacrifice,'<TH>" he wrote in a piece that was republished Tuesday in The Press Democrat. "But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched."
Buffett, who ranks No. 2 on Forbes' list of the richest Americans, said he paid nearly $7 million in federal taxes last year, but that was only 17.4 percent of his taxable income. The tax burden for others in his office ranged from 33 percent to 41 percent. The average was 36 percent.
He encouraged Congress to raise taxes on Americans making more than $1 million, including dividends and capital gains. "And for those who make $10 million or more .<TH>.<TH>. I would suggest an additional increase" in the tax rate, he wrote.
Buffett noted that while the poor and the middle class bear most of the country's burden in fighting overseas, the wealthy enjoy "extraordinary tax breaks." To him, raising taxes is a matter of equity.
It's also an issue of longevity, as there's little hope of America emerging from its economic doldrums without some form of tax increase. As we've said before, the United States can't resolve its debt problems by cutting spending alone.
It's refreshing to hear someone of Buffett's stature speaking up about it, again.
But Buffett's pleas stand in sharp contrast with the messages of Republican presidential candidates in last week's debate prior to the straw poll in Iowa. On cue, each made his or her pledge, once again, not to raise taxes. It was a promise as mindless as it was pointless.
As Buffett said, "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."
It's also time to stop coddling the discredited idea that raising any taxes will discourage economic growth and that only cutting taxes and spending will spur it. If that were the case, our nation would be thriving.
As Buffett noted, the nation added 40 million jobs between 1980 and 2000 when taxes were much higher. Since then, taxes have been slashed and job growth has suffered.
Buffett was also on target with his encouragement to eliminate the carried interest exemption, which inexplicably allows uber-wealthy investors, including hedge-fund managers, to be taxed at a 15 percent level.
"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," he said.
Buffett's commentary offered a refreshing and unique perspective — and challenged some entrenched thinking, at least within the American public. As for Washington, the impact is unknown.
Was anybody listening?