Aug. 15 (Bloomberg) -- Billionaire Warren Buffett urged Congress to raise taxes on the nation’s wealthiest individuals to help cut the U.S. budget deficit, saying it won’t inhibit investment or job growth.
“My friends and I have been coddled long enough by a billionaire-friendly Congress,” the chairman and chief executive officer of Berkshire Hathaway Inc. wrote in an opinion article published in the New York Times. “It’s time for our government to get serious about shared sacrifice.”
Buffett’s advocacy of higher taxes for the “mega-rich” may reinforce President Barack Obama’s call for an end to tax breaks for corporate-jet owners. In the op-ed, the 80-year-old investor said his federal tax bill last year, or the income tax he paid and payroll taxes paid by him and on his behalf, was $6,938,744.
“That sounds like a lot of money,” Buffett wrote. “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. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.”
A 12-member panel, formed in the Aug. 2 law that raised the nation’s debt ceiling and averted a possible default, is charged with finding $1.5 trillion in budget savings.
Democratic Representatives James Clyburn, Chris Van Hollen and Xavier Becerra will join Republican counterparts Dave Camp, Fred Upton and Jeb Hensarling. The Senate team includes Republicans Jon Kyl, Pat Toomey and Rob Portman and Democrats Patty Murray, John Kerry and Max Baucus. Murray, of Washington state, and Hensarling, of Texas, will be co-leaders.
Buffett said that for those making more than $1 million -- there were 236,883 such households in 2009 -- he would raise rates immediately on taxable income in excess of $1 million, including dividends and capital gains. For the 8,274 taxpayers who made $10 million or more, he said they should get an additional increase in the rate.
“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,” Buffett wrote.
He cited Internal Revenue Service data showing that the tax burden on the nation’s wealthy had fallen for the past two decades.
In 1992 the top 400 American earners had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that amount, he wrote. In 2008, while the aggregate income of the highest 400 had soared to $90.9 billion, the rate paid had fallen to 21.5 percent.
Buffett said the notion that high taxes discourage hiring and investment is false.
“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.
“People invest to make money, and potential taxes have never scared them off,” he said. “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.”
The U.S. unemployment rate has averaged 9.5 percent in the past two years, dropping to 9.1 percent in July from 9.2 percent a month earlier, a government report showed Aug. 5
To contact the reporter on this story: Michael Heath in Sydney at firstname.lastname@example.org
To contact the editor responsible for this story: Stephanie Phang at email@example.com