Buffett Proposes Minimum Tax on High Incomes
Warren Buffett, regarded by many as the greatest investor of all time, made waves earlier this week when he penned an op-ed for the New York Times titled "A Minimum Tax for the Wealthy". Buffett started the piece by stating that an investor would never turn down a great investment opportunity because of the taxes that they may incur if they happened to make money on the investment. During times of much higher capital gains and dividend taxes, Buffett states, "never did anyone mention taxes as a reason to forego an investment opportunity that I offered."
After pointing out that incomes and net worths for the nation's wealthiest have both increased substantially in recent years (the net worths of those on the Forbes 400 have increased from $300 billion in 1992 to $1.7 trillion currently), Buffett proposed two changes:
1) Expiration of Bush tax cuts for those making $500,000 or more per year (higher than the $250,000 cutoff that has been floated by President Obama)
2) Implementation of a "minimum tax" for people with high incomes.
Buffett suggests:
-minimum tax of 30% of taxable income between $1 million to $10 million
-minimum tax of 35% on amounts above that
Buffett says that this minimum tax needs to be enacted by Congress "right now".
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According to Buffett, the US government should have a goal of spending 21% of GDP and bringing in revenues of 18.5% of GDP. While this would not fully eliminate deficits, Buffett argues that this would make the servicing of the nation's debt load manageable (for comparison's sake, the US government spent 22.4% of GDP last year and took in just 15.5%).
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In short, Warren Buffett argued that:
1) the wealthy need to pay more taxes in order to help the nation get its books in order
2) higher tax rates (capital gains, dividend) won't prevent somebody from entering into a potentially profitable investment
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As you can probably imagine, reaction to Buffett's proposals has been mixed.
Source: NYTimes.com - A Minimum Tax for the Wealthy
Image: Art Comments
Filed under: General Knowledge
