Buffet’s Bullshit

Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.

Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.

Warren Buffet talks a big game, but his facts rarely demonstrate a functional knowledge of government and taxes.

Let’s talk about a number he doesn’t mention in his screed.

Buffet mentions the “staggering” amount of wealth those top earners make. The problem with Buffet’s mentioning of how much they make is that that 5% of Americans holds roughly 20% of the wealth in this country, yet pays 40% of the taxes paid.

Let’s put that number into terms regular people can understand.

Let’s say you and one hundred of your friends go out to dinner and the tab is $1000.

The five richest would eat $200 worth of food, but contribute $400 to the bill.

The remaining 95% would be responsible for only $600 of that bill.

But wait… Of that original 100, 47 pay absolutely nothing on the dinner.

Zero. Nada. Zilch.

So now 48 people are left with $600 worth of dinner to pay for.

The 47 who paid nothing, now tell the 48 who are paying, plus the 5 who paid most of it, they need to pay more because it’s only fair.

So 47% get a free dinner, and the 5% who paid most of it plus the 48% who are in the “middle” have to foot the entire bill.

That’s taxation in America.

Incidentally, if Warren Buffet truly believed he wasn’t paying enough in taxes, he could put his money where his mouth is, which he obviously isn’t. See, the United States Treasury has, since 1996, allowed citizens to make donations to reduce the national debt. Since the inception of the program, it has taken in a whopping $27m, and merely $2m this year.

It’s obvious Buffet isn’t making a meaningful contribution otherwise that number would be much larger, so my question to Mr. Buffet who’s troubled by his low tax rate: what’s stopping you from doing more?