Taxing the Wealthy on the Margins and on Average
Warren Buffett, the Oracle of Omaha, reiterated his view on a so-called “millionaires tax” in an op-ed piece in the New York Times on Sunday. If you’d like to read about what a billionaire thinks about what millionaires should do, it’s an interesting read.
Here’s a quick summary of his views:
First, in the not so distant past, marginal tax rates for upper income households and tax rates on capital gains and dividends were quite high and – guess what – the wealthy weren’t throwing their money under a mattress, they were investing. Second, the rich should pay their fair share in taxes. Buffett suggests that households with incomes above US$500,000 (not the US$250,000 that Obama has proposed) to return to the pre-Bush era tax rates. And he reiterated his “Buffet Rule,” which calls on Congress to develop a minimum tax for millionaires: 30% for income between US$1 million and US$10 million, and 35% for incomes over US$10 million. Finally, he is, of course, pushing for debt sustainability – moving revenues to 18.5% to GDP and spending to 21% of GDP. Buffet cites that the United States currently takes in 15.5% of GDP in revenue and spending is about 22.4% of GDP.
