By Peter Galuszka
One the recurring themes of James A. Bacon, the Bacon-In-Chief, and his Baconauts, is that while the vast, unwashed masses of Americans must endure cutbacks in their lifestyles and spending to prevent “Boomergeddon,” the rich are strangely left out of the equation.
Keep in mind that in the past 30 years, the percentage of the super rich has risen dramatically, while the middle class, the backbone of America, has stagnated. So, as we face years of spending cuts and pressures, for better or worse, to rein in taxes, it is interesting what one of the richest man in the world has to say.
Writing in this morning’s New York Times, Warren Buffett, sage of Omaha and investment king, writes that the tax breaks for the super-rich have gotten way out of control. “While 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,” he writes.
A few examples:
- The billionaire last year had a tax bill of $6,938,744. As big as that may seem, it was only 17.4 percent of Buffett’s taxable income and significantly below what ordinary Americans pay percentagewise.
- The rich are allowed to classify some of their income as “carried interest” taxable at a 15 percent rate.
- If the rich trade stock futures for all of 15 minutes, some 60 percent of their gain can be taxed at the 15 percent rate.
- Go back to 1976. Capital gains rates were 39.9 percent. Yet, in 1992, the highest-earning individuals — and that must include income from investments — paid only 29.2 percent to the feds. By 2008, that rate had slipped to 21.5 percent.
Buffett’s not alone in pointing out the inequities with the Daddy Warbucks. Writing today in The Washington Post, economist Robert Samuelson notes that with capital gains at a paltry 15 percent, they represent the lowest tax rates of all. What’s more, two thirds of capital gains go to the wealthiest one percent of the population.
Now if you read this blog, you get a Fox News Warp of reality. The Baconauts and Boomergeddons out there will insist that even thinking about raising the tax rates for the ultra-rich is “redistribution of wealth” more suitable for mangy, flea-bitten Bolsheviks. They argue that the richest earned their wealth, a point that is Looney Tunes since the vast majority got it by being lucky enough to have been born into the right family. I am constantly amazed at the lengths these people go in apologizing for the rich since they, themselves, are not all that rich.
Anyway, when the Congressional Gang of 15 gets around to reviewing budget and debt cutting strategies, let’s hope they take a gander at the super rich. That’s what Warren Buffett would have them do, and he’s not often wrong.There are currently no comments highlighted.