Warren Buffet Enters the Fray

A minimum tax for the wealthy?  Make it so, says Warren Buffet.

 

SUP­POSE that an investor you admire and trust comes to you with an in­vest­ment idea. “This is a good one,” he says en­thu­si­as­ti­cal­ly. “I’m in it, and I think you should be, too.”

Would your re­ply pos­si­bly be this? “Well, it all de­pends on what my tax rate will be on the gain you’re say­ing we’re go­ing to make. If the tax­es are too high, I would rather leave the mon­ey in my sav­ings ac­count, earn­ing a quar­ter of 1 per­cent.” On­ly in Gro­ver Norquist’s imag­i­na­tion does such a re­sponse ex­ist.

….  we need Con­gress, right now, to en­act a mini­mum tax on high in­comes. I would sug­gest 30 per­cent of tax­able in­come be­tween $1 mil­lion and $10 mil­lion, and 35 per­cent on amounts above that. A plain and sim­ple rule like that will block the ef­forts of lob­by­ists, lawyers and con­tri­bu­tion-hun­gry leg­is­la­tors to keep the ul­tra­rich pay­ing rates well be­low those in­curred by peo­ple with in­come just a tiny frac­tion of ours. On­ly a mini­mum tax on very high in­comes will pre­vent the stat­ed tax rate from be­ing evis­cer­at­ed by these war­riors for the wealthy.

Above all, we should not post­pone these changes in the name of “re­form­ing” the tax code. True, changes are bad­ly need­ed. We need to get rid of arrange­ments like “car­ried in­ter­est” that en­able in­come from la­bor to be mag­i­cal­ly con­vert­ed in­to cap­i­tal gains. And it’s sick­en­ing that a Cay­man Is­lands mail drop can be cen­tral to tax ma­neu­ver­ing by wealthy in­di­vid­u­als and cor­po­ra­tions.

But the re­form of such com­plex­ities should not pro­mote de­lay in our cor­rect­ing sim­ple and ex­pen­sive in­eq­ui­ties. We can’t let those who want to pro­tect the priv­i­leged get away with in­sist­ing that we do noth­ing un­til we can do

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