Buffett: "Stop Coddling The Super-Rich"

August 15, 2011 2:29 pm ET — Alan Pyke

RomneyNH

Mitt Romney's big splash in Iowa last week came not from his seventh-place finish in the Iowa straw poll, an expectedly weak showing given that he opted not to officially participate. Instead, Romney made news with his declaration that "corporations are people too, my friend." He was arguing against targeting billions in corporate profits as an avenue to lower deficits on the grounds that those profits ultimately end up in "people's pockets, human beings, my friend."

Today's New York Times op-ed from multi-billionaire investor Warren Buffett, "STOP CODDLING THE SUPER-RICH," illustrates why Romney's comments are wrongheaded. Corporate billions may go into human pockets, but the people Romney is so eager to defend just don't have to reach as far into their slacks as working people do when Tax Day comes:

OUR leaders have asked for "shared sacrifice." But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

While the 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. [...]

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It's nice to have friends in high places. [...]

The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It's a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.

Buffett goes on to debunk the notion that higher taxes on investment stifle growth: "I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain."

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