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  • Morning Bell: 4 Reasons Warren Buffett Is Wrong on Tax Hikes

    Let’s talk taxes. In a New York Times op-ed yesterday, famed investor and Berkshire Hathaway CEO Warren Buffett once again argued that the wealthy should be taxed more.

    This isn’t the first time Buffett has made the case for higher taxes, and it’s not the first time he’s been wrong. Here are four reasons he is wrong to push for tax hikes.

    1. Buffett says tax hikes won’t hurt jobs.

    Fact: Tax hikes, especially those he espouses, hurt jobs.

    Buffett cites periods when tax rates were high and says that “Under those burdensome rates,” employment “increased at a rapid clip.”

    This country has an employment problem right now, and tax rates aren’t even as high as Buffett wants. The tax increases President Obama champions would hit small businesses that create jobs. According to Treasury figures, 1.2 million Americans who employ people are paying their taxes through the individual income tax, and they would be hit head-on. The amount that their taxes would go up could be roughly equivalent to one employee’s salary, meaning that’s one person they can’t hire in the new year. A study by Ernst and Young estimates that these tax hikes would kill 710,000 jobs.

    2. Buffett says tax hikes won’t stop investors from investing.

    Fact: Any time you tax something, you get less of it.

    Buffett says: “So let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if—gasp—capital gains rates and ordinary income rates are increased. The ultrarich, including me, will forever pursue investment opportunities.”

    Let’s think about what taxes are intended to do. The cigarette tax is intended to curb smoking. Proponents of a carbon tax want to curb the amount of carbon emissions we are producing. In Washington, D.C., a plastic bag tax is intended to curb the number of plastic bags people use.

    When you tax something more, people do less of it. This is how taxes work. It doesn’t change because the behavior being taxed is investing rather than smoking.

    3. Buffett says the wealthy aren’t even paying a minimum tax.

    Fact: We already have an Alternative Minimum Tax.

    Buffett says, “We need Congress, right now, to enact a minimum tax on high incomes.”

    We already have this. It’s called the Alternative Minimum Tax. As Heritage’s Curtis Dubay explains:

    Congress passed the Alternative Minimum Tax (AMT) in the early 1970s to ensure that a few high-income taxpayers did not reduce their tax liability too much by taking advantage of all the deductions, exemptions, and credits Congress put in the tax code. But Congress did not index for inflation the income threshold over which families qualify for this extra tax. So now Congress must annually “patch” the AMT by raising the threshold to correct this mistake. Even with the patch, the AMT still ends up falling on almost 4 million taxpayers; Congress initially intended for it to hit only a few hundred.

    But here’s where the rubber meets the road: “According to the Congressional Budget Office (CBO), the top 1 percent of earners (those with incomes over $1.2 million in 2009) pay an effective tax rate on all federal taxes of 29 percent. That’s almost three times as high as the 11 percent average rate paid by the middle class.”

    The top 10 percent of earners in the United States already pay more than 70 percent of federal income taxes. To move forward in this debate, those who argue that we just need to “tax the rich” will have to get real. We can’t close the budget deficit by taxing the rich. Even though Buffett also claims…

    4. Buffett says we need to raise taxes to bring in more revenue for the government.

    Fact: The problem is government spending, not government revenue.

    Buffett says, “Our government’s goal should be to bring in revenues of 18.5 percent of [gross domestic product] and spend about 21 percent of G.D.P.”

    Revenues are lower now today than normal, not because of tax rates, but because of the slow-growing economy. As the economy recovers, so will revenues. And they will continue to grow as the economy thrives. Why? Because more people are investing, saving, working, and enjoying higher wages. The nifty little benefit for the government of a strong, growing economy is that people pay more in taxes.

    But on to spending. The White House already estimates that federal spending will be 23.1 percent of GDP this year—well above Buffett’s target. But, unlike taxes—which will return to the historical levels Buffett aims for, spending will continue to spiral ever upwards. In 25 years, spending will be 35.7 percent of GDP. In 2025, the big three entitlements will gobble up a full 18.5 percent of GDP—the entire amount of revenue that Buffett would like to raise.

    In Buffett’s world, then, after funding entitlements, that leaves only 2.5 percent of GDP for everything else (assuming that interest rates don’t go through the roof). The fact is that ever-growing entitlements have put spending on a trajectory toward a European-level implosion. If they are not reined in, taxes on everyone will have to rise perpetually just to keep pace.

    While Warren Buffett is right about many things, he is wrong about tax hikes. Which leads us to the real questions: Why are we even talking about tax hikes? Where are the spending cuts?

    >>> The tax debate in 5 minutes: Watch Heritage’s J.D. Foster discuss tax hikes on CNBC.

    Quick Hits:

    • Adam White of The Weekly Standard says we should “watch what Warren Buffett does, not what he says.”
    • U.S. and European officials seized 132 websites on Cyber Monday for allegedly selling counterfeit merchandise.
    • Shiite Muslims marked the anniversary of the death of the Prophet Muhammed’s grandson by self-flagellating, cutting their own backs until blood covered the floor of an Indian mosque.
    • One American and one Russian will begin training to spend an entire year on the International Space Station.
    • Tune in online to Istook Live! to hear Senator Jim DeMint (R-SC) talking lame duck, fiscal cliff, and more this morning. Istook Live! broadcasts from The Heritage Foundation from 9 a.m. to noon ET.
    Posted in Economics [slideshow_deploy]

    60 Responses to Morning Bell: 4 Reasons Warren Buffett Is Wrong on Tax Hikes

    1. Steve Jarret says:

      If Mr Buffet likes Unions so much, his shops should be Unionized. Middle of the country is mostly Non-Union

      Mr Buffet loves government and being Democratic because he loves Taxes, especially the death tax. See Mr Buffet has a life Insurance company. Most folks who buy life insurance to take the death tax that their spouses would be faced with.

      Also he owns an insurance company called GEICO, The Government Employees Insurance Company (GEICO /??a?ko?/) is an auto insurance company. It is a wholly owned subsidiary of Berkshire Hathaway

      Any Questions

      • Sam says:

        Isn't this just precious coming from a hypocrite that has multiple long time law suits in the making to prevent paying his own taxes? He has absolutely no credibility.

      • Bev says:

        Sounds like Cons should be telling their leaders to accept the fiscal cliff and austerity measures. It'll immediately have spending cuts and revenue. If deficit is that big a deal, then let's all take the bite and deal with it; but we need to stop having unfunded wars. If you want to send soldiers someplace, pay the cost. Close embassies and get back to the business of just worrying about USA. Get rid of schools, don't fund roads, no FCC, no FDA, no regulations. Tweet your house rep and let them know that we want to starve the full govt beast. No police, no jails, no courts, no libraries, farm aid, no deductions for property, charity or anything else. Just a straight tax w/o exception. If any of it goes, I say it all should go.

    2. Brian says:

      Looking at point #1, an average employee's salary is $25k???? When taking into consideration benefits and employer taxes, wouldn't that simply be a minimum wage job? Yup…we need more of those!

      And if the $25,000 were the actual tax increase, at what income level must you be to get a tax "increase" of that amount? Since the proposed tax rate would go from 35% to 40%, I would guess you'd need a heck of an income to pay that as an "increase" over what you would normally pay at the lower rate.

      In my warped way of thinking, wouldn't the REAL job creators be consumers? You can reduce the tax rate to 0%, and trust me, no business owner will hire anyone if they don't have the sales to justify an increase in their output. And just the opposite: if the tax rate were jacked up to 50%, no business owner would have a problem hiring someone if their sales justified such a move.

      And finally, I don't believe our government has just a "spending problem". The problem is two-fold…spending AND revenue. If Congress wants to solve our budget problems, it will be done with a compromise of tax increase and spending cuts…$1 tax increase for $3 spending cuts sounds pretty good to me.

      Just my humble opinion…

      • ThomNJ says:

        I'd prefer the $3 cuts for each current $9 spent…with no tax increase, and the complete elimination of baseline budgeting…..that's a real killer and wholly unnecessary.

      • Bob Landry says:

        I like your thinking. "And finally, I don't believe our government has just a "spending problem". The problem is two-fold…spending AND revenue. If Congress wants to solve our budget problems, it will be done with a compromise of tax increase and spending cuts…" I worry that one side wants spending cuts (but primarily to entitlement programs, not foreign aid or defense or God forbid their own salaries/perks/benefits…) and the other side wants just revenue. Well I know that if you give Congress (and that is the problem here, not whichever "idiot" (Dem or Repub), 1$ they spend $2. If you cut 1$ from one program, they spend $2 on another one. Revenue cap and spending cap first, then decide who gets what.

      • greekdish says:

        Consumers arent job creators. Until the real job creators actualy produce a product to sell to the consumers, consumers are creating jobs much like the unemployed…. they dont. Job creators are citizens who invest their own money or borrow money on their name and assets to start a business….they then have to pay off that loan.

        And where do you get $25k as average employee's salary? And since the largest section of the unemployed are those without a high school degree… yes, those are the jobs we need. Even if you created 1 million engineering, software development or nursing jobs TOMORROW, it wouldnt lower unemployment because there is no one qualified to fill those jobs. Majority of unemployed re either HS dropouts or just have those HS degrees. Look at the stats at bls.gov.

      • Humble Pie says:

        Without employers there are no consumers unless you mean those consumers who receive govt handouts. No employers, no jobs, no consumers.

        In my humble opinion

      • Steve Hinds says:

        Brian, perhaps it would help you if you read the article and not just scan it. First of all, if there was not a need for the "$25,000" job then there would not be any available. You know, sort of like cassettes, they are gone because there is no need. Secondly, the $25,000 tax increase the author speaks of is an average of that particular group.

        I agree with your third paragraph concerning "your warped way of thinking". IMHO, people become business owners for a lot of reasons and a few are freedom, your own boss, opportunity to succeed financially if you are smart in your business. If a small business owner has 5 employees that AVERAGE $25,000 / year in income and he makes $200,000 / year in business income, that would leave the employer with $75,000 of personal income which would be taxed at the ordinary income tax rate. The employer is happy with this arrangement and so are the employees. Obama comes along with a tax increase that would affect this employer adversely, so he makes the decision to reduce his work (less headaches) and get below the $200,000 income threshold. He fires one employee, the rest still average $25,000 and the employer still makes the income he (risk taker) wants. One thing to consider in your thought process, doubling your business and number of employees while the owner still makes the same or less amount of money, is not something a good business person will do, IMHO.

        As to your last paragraph, I disagree. We have a spending and regulation problem, period!!! One of the reasons we are in the mess we are in is because we are living above our means. INCREASING TAXES HAS BEEN PROVEN REPEATEDLY TO AFFECT THE ECONOMY ADVERSELY. I would agree that along with spending cuts we should take action to "increase revenue" by closing loopholes in the tax code, but a better idea would be to go to a "Fair Tax System". Every citizen has a stack in the prosperity of the country.

        As you said, just my humble opinion!

      • sdfultz says:

        Thanks Brian, great insight!
        Seems some folks didn't complain a bit when the GOV was spending on war, now suddenly we have a spending problem.

        • Bobbie says:

          the government is paid to defend us not to nurse us!! What will America do when all money is going to nursing from cradle to grave (leaving out half the population as planned) and the hate filled world comes bombing at America’s door? No biggie eh? You should learn to have self respect so you gain the ability to rely more on yourself and the mind recognition to know when principle is removed by government communism is leading America’s way.

    3. Lloyd Scallan says:

      Buffett is just another billionaire that has enough money to last 20 lifetimes. He is also a Obama lackey that has his, but does not want to anyone else to get to his level of financial power. So he follows the socialistic policies of a dictator that will protect the chosen when our economic system collapses.

      • John says:

        Buffett is part of an elite group that should be shut out of any political influence if the world is to survive. Failure to heed this at all levels of influence is detrimental to the United States and the rest of the planet.

    4. Barbara says:

      so how about interview warren buffet and debate these issues with him in the bright lights of the media so the public can see him for what he is. truth is, he knows what he is saying is disingenuous. aside from that, people want to believe him just like they want to believe obama. the facts are inconvenient.

    5. don says:

      How come Buffet is not in jail? He owes millions in taxes. Oh I forgot, he is one of them.

      • @jeff92677 says:

        He also trades on inside information – he gets it when he negotiates deals to buy and sell companies, or when he is asked to invest. He gets information the rest of us would love to see.

    6. It is always the same with the Ultra Rich. The reason they will refrain from investing or hiring is to discourage the government from taxing them. If they have 50 billion in capital available for investing and the government asks them to pay a couple of million more in taxes, it doesn't take enough away to harm them in any way, but they can't stand losing anything because they are totally possessed by greed.

      • Bob Landry says:

        You are right on the spot. It is about Greed. Everyone, particularly those who have the most, wants more. But to the guy with a net worth of $10K, ,more is $15K. To the one whose net worth is $10 Million, more is $15 million. And the $5 Million more that they get, goes in their pocket, not to create jobs.

      • Ultra Average says:

        Enough with the class warfare already. The enemy is not the rich or the ultra rich. Please read Adam Smith. The real enemy are the politicians who play both sides against the other while they become ultra rich. Until we understand this we will continue to get more of the same.

      • WTF says:

        only 1% of Americans are "ultra rich" hence the whole 99% thing. their inst enough rich people to tax to support all these government programs. so guess who is going to have to pay up in the end. You and I.

    7. Jack Hawk says:

      If one of the companys that Berkshire owned had the fiscal disciple of the Federal Government, Buffett would sell it, not invest more if his personal wealth in it.

    8. PaulE says:

      Buffett is the quintessential definition of a limousine liberal. He's made his money over the years through the benefit of the capitalist system. In no other nation would he have been afforded the opportunities for success that he has leveraged to transform himself from "an average guy" into one of the richest men in the world. Now that he's socked 99.99 percent of it away in various tax-free trusts, he feels the need to ensure no one else can replicate his success by calling for a new tax, that by the way, will NOT impact him in any way. The tax he proposes is to ensure that others don't have the chance to build even a small percentage of the wealth he has amassed over his career. All while he's preaching about "fairness" and "income inequality". A true hypocrite.

      Of course the Heritage Foundation is 100 percent correct in the fact we already have a Buffett Tax and it's called the AMT. Yet another example of Washington targeting a very small group of people, that eventually ends up impacting millions of average American taxpayers every year.

      • Jcal1 says:

        The AMT really isn't a "Buffet Tax" as it kicks in due to very complex triggers that pertain to deductions, state taxes paid, etc. It is a very archaic mess. For many of us "lower – higher" income earners ($100K-$1M) (and some higher or lower on either end, we get hit with a flat tax at 28% that limits our deductions – and eliminates our deduction for state and local taxes. Eliminating deductions on state and local taxes is simply wrong, and goes against all of the basic principles of our current tax system.

        While I do not feel that the AMT is really a "Buffet Tax", it does not mean that I feel that the taxes of higher income earners are being handled well politically (as well as in the present). The income range I stated above is not a small segment of the population. They are however, the biggest casualties of the latest tax wars being fought in Congress. Even more tiring is the fact that this is clearly a political move – that ignores anyone that gets caught in the crossfire.

      • We the People says:

        One thing that seems unique to the people who oppose the Buffet rule, is that they just can't believe that anyone would do anything unselfish. The fact that WB gives an incredible amount of money to the Gates foundation which helps millions of the less fortunate, means nothing; according to people like Paul, he is still a bad guy. Most of us liberals, can't imagine how much money it takes to make some people happy and why so many of the rich are soooooo greedy and self interested. There are wealthy people with dancing horses in American while there are children without shoes . We need a new party that calls a spade, a spade. It should be called the GREEDY party. They want so much more than their fair share of the earth's riches. They want others to go without food, shelter, clothing and medical care so I can have yachts, and such enjoyed by the party of GREED. If there is a God, he will reward the Democrats who care for those in need, not those who subscribe to the party of GREED.

    9. TeriDavisNewman says:

      The government cannot stop spending. They ran out of other people's money SEVENTEEN TRILLION DOLLARS AGO!!!!!! They promised the moon, sun and stars to the entitlement class to get the Communist Spender in Chief re-elected, which was a huge mistake because businesses are going to continue to hunker down to survive–and we do that by firing people and outsourcing to make up the taxes the government wants from us. There are no circumstances under which I will hire ANYONE for the next 4 years. I am working 16 hours a day 7 days a week to keep up with the demand and I'd rather do it myself than hire someone. I have converted my employees to independent contractors to avoid Obamacare penalties and saved a ton on money on payroll taxes and benefits as an expected side effect. Expect to see more conversions from employee to ICs as it's what business owners are going to have to do to survive and is now the norm in many industries.

      • Keep running your business that way, and i will look forward to your "my business failed because of Obama" post..

        but only because it will be filled with irony and contradictions…

      • We the people says:

        "I have converted my employees to independent contractors to avoid Obamacare penalties and saved a ton on money on payroll taxes and benefits as an expected side effect."

        Yeah, your employees don't deserve health care, you are a true Republican. Hey, all the more for you, you crafty devil. I can hear the pride in your voice. You are so clever, By the way, do you have healthcare?

    10. steve trattner says:

      I wish this article had referred to the critical fact that continues to be left out of this debate which is that reducing the tax rates on upper income taxpayers during Reagan years taught us that this spurred job hiring and tax revenues. Also during then and after Bush tax cuts were fully implemented the upper 1% taxpayers total percentage of tax revenues went up.

      These facts destroy the class welfare argument and is necessary to win the battle on tax cuts which was lost during the last election. At the same time, I support curbing tax deductions somewhat for the upper income people as I do not believe that there is any evidence that this will be hinder investment that leads to more jobs and corresponding increase in tax revenues.

      Steve from Maryland

    11. Blair Franconia, NH says:

      To paraphrase the late Paul Harvey, "Ronald Reagan said it: 'America doesn't have a revenue problem. America
      has a spending problem.'"

    12. Don Wolf says:

      In your Morning Bell commenting on the subject of raising taxes on the rich, you fail to make one pertinent point. The presumed object of raising these taxes is to raise revenue. Historically it has been the experience of the U.S. government that raising taxes on the upper income levels of taxpayers has actually resulted in less income to the federal government. While raising the rate on upper income people would seem to increase income to the government, what is missing is what actually happens. The equation has another important number and that is taxable income. Legally these people can lower their taxable income by investing in tax free investments, such as municipal bonds.this argument shoud be presented.

    13. Larry White says:

      Ideology – not facts, history or even economics- drives the left and always has. We are loosing this battle…but thanks Amy and Alison such a concise, repeatable argument. Please don't stop.

    14. Lee Rohde says:

      Referring to the graph of entitlements and interest, Social Security should not be portrayed as an expense, at least not before 2030 or so when the Trust Fund will be exhausted should no action be taken. There is a modest "expense" when the bonds are redeemed at which time the accumulated interest must be paid. Otherwise the Trust Fund should be viewed as any other loan made to the government, such as a treasury bond, in which only the interest is portrayed. On the other hand, the graph does not show any outflow to pay down the national debt. For some reason, we don't look at the alternatives to "optional" government spending. By this I mean, expenses that could be undertaken by the private sector, such as all medical and health costs, or perhaps basic scientific and medical research. If all medical is left to the private sector we could expect that the poor, unless covered by their employer, would get minimal care and then via emergency rooms which just spreads it back onto society. Further, we would not get health service as efficient as most developed countries. Is this what we want? In the area of research,for example, few seem to understand that this is the backbone of our technical leadership in the world and it will not get done by profit making private industry because there is no quick return.
      We should be examining every element of federal expense to determine if it is truly necessary and,if so, is it most efficiently done by government and at what level..fed, state, local.

    15. Mark Sholander says:

      I'm amazed that no one seemed to notice that when Mr. Buffett wanted to "give away" (reduce his estate tax) by $50B+ he did not give it to the federal government to spend in its wisdom. Instead he donated it to a charitable organization (The Gates Foundation)!

    16. natch says:

      "Why are we even talking about tax hikes? Where are the spending cuts?" Exactly. Politicians on both sides of the aisle, but especially the Republican, have blurred the discussion when it comes to funding the government. All of them have pushed the idea that we need JOBS and keep trying to obfuscate the need to cut spending. This is the real crime today in politics. Politicians don't want to cut spending they want more workers to provide the income to the government so they can continue their spending binge. That is all they care about and this is why Congress' popularity has dropped to a whopping 10 percent.

    17. natch says:

      "Why are we even talking about tax hikes? Where are the spending cuts?" Exactly. Politicians on both sides of the aisle obfuscate the spending issue. Instead they say we need more jobs. More jobs means more income to Washington. That way they will have the money to continue their spending binge. It's time for a Coolidge coup. It's time to cut government – big time.

    18. toledofan says:

      At the end of the day, if the business investments of Buffet were'nt giving him a signifigant ROI, he'd sell them or get rid of them in a heartbeat. I guess it just defies logic, I mean, he can give all his money to the government, if he desires, so, if he wants to give more he should what's stopping him? I think that until he and others recognize that the spending is out of control nothing will change. I think in the short term he will make more money off of the government even if the rate is increased because the loopholes will be bigger.

    19. Karl Stecher says:

      1. Revenues to the government do not increase by raising taxes, as this article leads into. They increase by lowering tax rates. See Kennedy, JF, Reagan, R. Hard to tell with GW Bush because 9/11 soon followed.

      2. Clinton's tax rates (top 39.6%) were somewhat offset by the dotcom surge on the way to being a bubble, and by having Newt Gingrich and the elected Republicans of 1994 running the budget.

      3. The 1997 action under Bill Clinton, where capital gains rates were so dramatically lowered, markedly increased the flow of money and revenue to the government. This also helped to come close to balancing the budget for a year or so, though indeed the national debt increased by 65% under Clinton, with no 9/11 (Clinton paid not much attention to the World Trade Center car bombs, or the Cole) and no recognized "wars."

      4. Buffett does indeed owe about a Billion or so in back taxes…which he is arguing. If he thinks taxes are so great, why doesn't he just give this amount to the government?

    20. Carson Taylor says:

      I think Buffet understates his true tax rate. If he owns 100% of a company, he also pays the company's corporate tax. Similar is true for many if not most upper income people.

    21. Bobbie says:

      Logic proves Mr. Buffet wrong. Don't give in. The rich was once deemed "millionaires." In a period of time it dropped to 250,000 aires (not even a mention of billionaires) with no consideration to costs and responsibilities government doesn't pay out of their pockets or take responsibly but lays more taxes on people to cover it up. Buffet must have more loopholes or he'd realize his ignorance and see the logic.

      This is a con. Please. America doesn't deserve this type of rude and reckless leadership that promised to do in one term of trillion dollar spending what they want more money to continue to do that shows corruption than itsy bitsy signs of what they call recovery. No transparency. Trillions lost!

      Promising full recovery in 10 years if they could just "tax the rich a little bit extra" is a move that America doesn't want taken from the control of those who earned it, by unconstitutional governmental abuse to use against her as it has been under democratic leadership.

      The initiated acts against America's freedom and liberties in the last 4 years is bigoting, treacherous and unprincipled. Anything promising from the democrats isn't without heavy burdens and hardships on free people to get to their "promise." The country's bankrupt so the democrats can say "see we did it?" He won't cut spending immediately but they'll increase taxes yesterday! No fairness. He made this mess and holds himself unaccountable!! America is undeserving .

      Time for the wiser to correct the errors that brought America here and build principle and human endurance in the cowards with authority that cause this. The President's cuts is all that's needed to abstain from laying sacrifice on America(ns.) Does he ever mention what his promised cuts entail? Nope. Because he doesn't intend on correcting to fulfill his part while people become complacent to his words that reflect lies! He'd rather continue funding special interests like Van Jones and the gang spreading hatred for a skin color. His "special interests" are unproductive!

      Don't give up or in! PLEASE! You pledged with honor. America needs principle that's lost in the democratic regime.

      There are people (although maybe few) that qualify for government assistance that won't take it based on America's principles yet increasing taxes threatening independence makes the unconstitutional provisions, set ups for government gain ONLY!

    22. Kathleen McCollum says:

      Buffet still won't pay the tax because he pays at the cap gains rate and hides all his other money in the Bill Gates mattress. Why don't more folks bring this up. Warren hides his money with Gates so the govt can't spend it in a way he doesn't like. Duh!!!

    23. D J Golio says:

      I think Buffett knows absolutely nothing about economic growth drivers or taxes for that matter, especially as to what in the past has increased revenues into the Federal and state treasuries. It certainly was not higher rates. Lower rates motivate people and small businesses to invest and create growth which in turn creates jobs and more taxpayers along with the new jobs. He is fortunate to have been lucky throughout his life in amassing his fortune that had nothing to do with his brains.

      • Pragmatic says:

        Let me get this straight. Romney would have made a great President because of his business experience and his demonstrated success in business. However, Buffett, doesn't know what he is talking about and just got lucky?

        That's what I'm hearing if I put your statement with the GOP's presidential campaign (which, I'm assuming you supported).

        Also, there is no evidence that high taxes are causal to growth.

    24. Benton H Marder says:

      Here is a suggestion for Mr Buffett: Figure out your total wealth, sit down and cut a check for 90% of the whole, and send it to the taxman. In short: put your money where your mouth is, OK?
      Back in ’08, Brack Obama was making noises to ‘Joe the Plumber’ about ‘spreading the wealth around’. Joe should have come back and said, “OK, you spread your wealth around the way you want, and I’ll spread my wealth around the way I want. That ‘s perfectly fair — isn’t it?” But the truth of the matter is that Obama’s kind prefers to spread other people’s wealth around, but not their own — which is frequently increased by insider trading and sweetheart deals. This is why I detest politicians and political parties.

    25. John Beck says:

      This whole debate about how the economy should run, is one big enigma. On one hand, if you are not a genius, at the top of your class, and you aren't a recognized expert, you don't even have a place at the table in this discussion. On the other hand, excessive and uncontrolled government spending is not seen as a problem to Liberals. They even promote it. And the "geniuses" spin that fact into something that is "necessary," even if it's ultimately destructive. Even a dumb guy like me can connect the dots, and see that there is an agenda behind all the spending and imminent bankrupting of our country. I am convinced that many people know this to be true, including voices like Mark Levin, Rush Limbaugh, and Sean Hannity.

      The obvious reason to drive our country into insolvency is so we will have to go through a "reorganization," which will involve changing our system of self-government in fundamental ways. That includes dissolving old "agreements" such as our Constitutional foundations, our financial obligations and form of contracts, and even bedrock principles such as private property rights.

      To listen to people like Warren Buffet, and his promotion of higher taxation, is similar to listening to a salesman who tells you that you "need" something. What you must do is look at how such a proponent benefits or gains from such a thing. How does someone like Warren Buffet stand to gain from increasing his own taxes? That is not even logical, or congruent with economic behavior. Why is he not more concerned with cost containment? i.e., controlling government spending and outlays? So using his logic, does he completely ignore cost containment in the companies comprising his Berkshire Hathaway portfolio? If so, what kind of a business model is that? He is either a charlatan, or a complete fool. Either way, he is to be avoided.

      • @jeff92677 says:

        Buffett's wealth is not based on Income, it's based on real Wealth – like about $50 billion in wealth. Let's focus on wealth and ask him to pay 2% on any net wealth above (pick a number) say 100 Million dollars. That would mean he'd pay about $1 Billion in taxes regardless of how he shelters his income.

        Wealth is Wealth, Income is only a weak correlate to real wealth. Buffett knows it, that's why he promotes INCOME taxes and not PROPERTY taxes on his wealth. We all pay property taxes, Buffett should pay taxes on his assets — we pay to protect them, we pay for infrastructure to support his wealth, our legal system protects his wealth, let him pay for these benefits from his Wealth, not his income.

    26. Norwood McDaniel says:

      Doesn't Buffett know how to cut spending!! There is nothing holding Buffett back from writing a check for a Billion to the Government.! All show and no go!

    27. Vic Parrish says:

      Nice discussion and comments; good one to share given all the discussion on the fiscal cliff. Bad part is we have no parachutes.

    28. Allen Curtis says:

      I propose that the Rupublicans pass thier own versions of tax and budget that are fiscally sound and will work. Sell it to the people and refuse to negotionate on the principle of what is needed for the best for the whole country.

      Then challenge the President and Democrats to come up with thier plan. The Replicans would then abstain from voting on the Democrat plan, thus assuring it passes, let the President sign, and the Democrats own the whole thing. It will be a painful dissaster for the country, but then the whole country will see what happens when you let liberals get all of what they want.

    29. Ian says:

      Also, if you're opening a business with this awesome investment money, you need customers. If people are economically in hard times, they have less disposable income. And so cannot patronize your business. And so the business is much more likely to fail. And so the debt gets worse. One might conclude that shifting a greater portion of the tax burden onto the very wealthy (and thus less on everyone else) would ultimately free up more disposable income amongst the middle class, the much more populous, and powerful, factor in determining the strength of the economy. Then they could go out and spend. But, no, no. Let's gut social welfare, increase the difficulty of middle class people to afford food and housing, cut back on student loans so school's more expensive, keep medical costs as high as possible with a purely for-profit health care industry, and that way, the rich will have a lot more money so they can open businesses no one will use. Good thinking.

    30. Ian says:

      Also, since the alternative mimimum tax that's already in place is doing such a good job, and all the rich are paying 30% in taxes every year, how the hell did Mitt Romney manage a 14.1% rate in 2011? 2011 being a year where we living under that kommunist kenyan mooslin?

      Oh, right. Wouldn't do to discuss those things. Libs, entitlement, etc. Arg! Angry….

    31. Steve says:

      I particularly like point #2.

      "2. Buffett says tax hikes won’t stop investors from investing.

      Fact: Any time you tax something, you get less of it."

      Oh yeah, taxing investment income is like a punishment on investing. So let's do what the Republicans are advocating: No taxes on investment income such as interest, dividends and capital gains, and only taxes on wages and salaries. But wait! By your logic, that would mean you would be punishing people for working! Wouldn't that mean people would work less! You Republicans have seriously ridiculous ways of thinking.

    32. quentin felidck says:

      It really amazes me, that sopposedly inteligent, sane, reasonable people can spew out such ignorant rubbish when they open their mouths.

    33. The Bronx Boy says:

      Under President Clinton corporate taxes were almost 2x what they are now and we had a booming economy. Who stimulates our economy? It is the middle class. Giving tax breaks to people who make more than $250,000 will do nothing to create jobs. Do you think a small business owner will hire more people just because becuase they get a tax break. Please that makes no sense. The only way hiring occurs isbusiness warrants it. This is when the middle class customers buy more and spend more in the store. Economics 101 which apparently you never had this course.

    34. Martin Pace says:

      Over the last 30 years the rich have become even richer and control an even larger percentage of overall wealth (and it still continues to increase). Yet they complain about wealth redistribution to the poor.

      The poor see their jobs moved overseas or automated (so that the rich can even gain more wealth) and the only replacement jobs do not pay enough to support themselves let alone their families so they require government assistance. The rich who moved these jobs overseas so that they could have several homes around the country/world and multiple cars call these people slackers, looking for handouts.

      The rich create the very problem that they complain about and don't see how hypocritical they themselves are.

    35. Mike Smith says:

      Mr. Buffett has no standing or basis to support tax hikes. He is always fond of citing that he pays higher marginal taxes than his own secretary. Now, let's get serious and compare apples to apples. Mr. Buffett derives nearly 100% of his income from selling his assets at the current favorable capital gains income tax rates that are currently at 15%. A majority of his secretary's income is ordinary income which at her level of pay (I believe I heard she makes somewhere in the range of $200,000 plus a year) is taxed at ordinary income tax rates. Of course, she will pay more at 30% plus ordinary marginal income tax rates versus a 15% capital gains rate.

      Realistically, how many people even among the "wealthy" can live solely from cashing in investments held in the long term at favorable rates.

      Further, Mr. Buffett has pledged or donated an overwhelming portion of his wealth to the Gates foundation. His income tax deduction from that donation would nearly eliminate any income tax he pays. Again, how many "wealthy" people have the ability to irrevocably give away those kinds of resources. My understanding is the donation to the Gates foundation approaches $30 billion. Mr. Buffett has enough charitable deduction carryovers to last beyond his lifetime plus a 100 years.

      Of course, Mr. Buffett never mentions that President Obama considers anyone with an income of $250,000 or more to be wealthy. $250,000 of income in today's society makes you very comfortable. It is hardly anything that compares to the wealth of individuals like Warren Buffett.

      While Mr. Buffett's philanthropy is admirable and appreciated, his credibility to discuss tax policy given his unique circumstances is laughable at best and really cannot be taken seriously. He really distorts the tax policy of this country beyond anything that is realistic.

    36. Tony R says:

      Many good points here and a few ignorant ones.

      First, Warren Buffet doesn't pay taxes like most business owners because he doesn't pay himself a salary, he pays himself in stock in his company so he can pay less taxes. He is counting on what Marx said you need in order to implement a socialist utopia, useful idiots. If you think taxing the rich will fix our economy you are one of those idiots and the socialist Democrat party are so happy you are there to vote for them.

      Second, Obama proposed during the debates and the most recent campaign that he would cut spending by $2.50 for every $1.00 in tax increases. Now, for all you math geniuses out there, what proposal did he present the other day? He proposed to increase taxes by $1.6 trillion and cut spending by $400 billion. Is that what he promised. For the mathematically challenged that is a bit short in spending cuts. If the president wants to increase taxes by $1.6 trillion he promised he would cut spending by $4 trillion dollars. Those are the words from his mouth. He is $3.6 trillion short in spending cuts. His spending cuts are only 10% of what he promised.

      Don't tell me he can do this because he won. Do you think when he made that promise that he was saying this was his proposal if he lost? NO, it is what he said he would do if he won. Just once I wish the useful idiots that vote for the socialist Democratic party would be honest and ask their president to do what he said he would do, but that is asking too much. You forget and are easily manipulated to "tax the rich" and forget all else. I'll see you at the bottom when we implode with entitlements and no income.

    37. anne kojak says:

      I think Warren Buffett has dementia….no other explanation.

    38. Mark F. says:

      Rand Paul proposed $500 billion in spending cuts earlier and was laughed at by cowardly Republicans. This is the party of the big spending and taxing Bushes and Ronald Reagan, and it has no credibility.

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