I have this theory about mega-rich people being occasionally embarrassed by their own fortune. It’s only a theory, but with Warren Buffett’s recent op-ed in the New York Times I think his post is partly about wanted to be liked by people. Maybe he wants you to click on the Like button on his Facebook page.
Let’s first get this out of the way. If you want to pay more to the federal government thinking you’re one of those billionaires being coddled by the federal government, write a friggin’ check.
Second thing … If Warren Buffett thinks giving more money to the federal government will solve some issues, then why doesn’t he pledge to give half of what he originally pledged to the Bill & Melinda Gates Foundation directly to the federal government? His fortune in 2006 was estimated to be $44 billion, so that could be a check for $22 billion for Congress to use to pay a portion of the debt or spend.
With a 2011 budget of $3.8 trillion, that would cover the federal government’s expenses for about 1.5 business days. Look Mr. Buffett, there are not enough of you to make a difference, and I’m sick of people like you completely ignoring the real problem that exists; we’re spending too much money we do not have. Look for the words spend or spending in his op-ed … they are nowhere to be found.
Buffett wants to increase taxes not only on income, but dividends and capital gains because some families – like the Kennedy clan – make most of their money from investment income. The big problem I have with this is that the federal government has already received their cut on the original funds, yet they want to get involved with every transaction they can get their fingers into. Why?
A family member has a primary home and a vacation home. The vacation home is four hours away by car, and she’d like to sell, and purchase another vacation home that is closer to her primary residence to reduce the drive time. Guess what? Since the vacation home is not her primary residence, the federal government will steal 15 percent of the profit she makes when and if she sells the place. That’s down-right criminal.
Buffett suggests, with my emphasis in bold…
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.
Buffett does not suggest a rate, but he mentions he and his billionaire buddies are being coddled at effective rates near 18 percent, using his own example of paying $7 million in – what I assume to be – federal taxes last year. If we outright doubled the taxes collected from those earning $1 million or more in 2009, you’d increase the government’s take by $177.5 billion.
The deficit for 2009 was $1.4 trillion.
There is no way in hell the millionaires and billionaires will be willing to – or even be able to in some instances – double their payments to the Treasury, so let’s run the numbers that would be certainly hailed by the media and the congress-critters in Washington as some sort of bi-partisan, unheard of, once-in-a-lifetime comprimise shall we?
Would it be good enough to pass legislation that increased the tax burden of those earning $1 million or more by 25 percent? Certainly the left would love this, and it would be branded an Obama success story! Angels would sing. Rep. Nancy Pelosi’s (D-Calif.) face would crack. That would total a federal tax increase of $44 billion – darn close to Buffett’s 2006 estimated wealth – and we’d be able to run the federal government for three business days.
In case you didn’t note the sarcasm, the 25 percent increase would be a total pipe-dream. Math Warren …. math.