I'd like to share some excerpts from an article written by Warren E. Buffett, published in the New York Times OP-ED on Monday, August 15, 2011. First, for those of you who are not familiar with Mr. Buffett, he might be conservatively described as America's greatest living investor and business strategist. From his humble beginnings in Omaha Nebraska, he has built a personal fortune estimated by Forbes to be $50 billion; making him the third wealthiest human being on our planet.
He has pledged to donate most of his fortune to the Gate's Foundation and has sought out fellow billionaires to also pledge their fortunes for philanthropic causes. He has long been respected for his good old common sense and personally addresses the appreciative shareholders of his company, Berkshire Hathaway each year at the annual shareholder's meeting in Omaha.
With our nation's budget deficit growing and tax rates at a 50 year low, Mr. Buffett is simply advocating for what any good American capitalist should - a reasonable solution to a budget problem which (as he sees it) will inevitably have a negative impact on American business and on Americans in general. His article is titled: Stop Coddling the Super-Rich. Here are a few comments made by Mr. Buffett in that article:
"While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks."
"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."
"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. 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."
"Twelve members of Congress will soon take on the crucial job of rearranging our country's finances. Job one for the 12 is to pare down some future promises that even a rich America can't fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. 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 billionare-friendly Congress. It's time for our government to get serious about shared sacrifice."
If implemented, Mr. Buffett's proposal would positively impact our nation's budget. Based on projections by the Joint Committee on Taxation, the Congressional Budget Office and the Treasury, the revenue increase generated from the super-rich would approach $500 billion over the next decade. This is about a third of what the Congressional committee is supposed to cut from the deficit. And restoring capital gains and dividend rates for everyone to levels that existed before the Bush tax cuts would bring the Treasury an additional $340 billion over the next decade.
Keep in mind that this is potentially money which will NOT be required to be cut from such large portions of the budget pie such as: defense, Medicare, education and infrastructure improvement.
Mr. Buffett is too smart to run for president. But if he did, he'd have my vote! In any case, feel free to contact Representative Gosar, and Senators McCain and Kyl to let them know your opinion on this matter.
And for those of you who are seeking an alternative to Democrats and Republicans in 2012, please visit: www.americanselect.com.