Buffett Watch

Buffett's Renewed 'Tax the Super-Rich' Call Ignites Strong Debate

Warren Buffett
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Warren Buffett has said, almost yelled, 'Tax the Super-Rich!' many times over the past few years.

But his latest New York Times op-ed headlined appears to have hit a "nerve," as Reuters puts it, with Washington gearing up for another debate on how to cut the nation's deficit.

On the campaign trial today, GOP presidential hopeful Michele Bachmann joined Buffett critics asking, in effect, 'If he wants a bigger tax bill, why doesn't he go ahead and make a voluntary contribution to the Treasury?'

Bachmann on Buffett

Arguing that President Obama has "redefined millionaire and billionaire as any company that makes over $200,000 a year," Bachmann told a campaign audience in Spartanburg, South Carolina:

"Now the President's friend Warren Buffett just came out and said all the billionaires should be paying more money.  I have a suggestion, Mr. Buffett, write a big check today, there is nothing you have to wait for. (Cheers) ... Perhaps Mr. Buffett would like to give away his entire fortune above 200,000 dollars.  That's what you want to do, have at it, give it to the federal government.  But don't ask the rest of us have our taxes increased because you want to have a sound bite."

(In his op-ed, Buffett proposed higher tax rates for taxable income in excess of $1 million, and an additional rate increase for those making $10 million or more a year.)

President Obama on Buffett's Op-Ed

Speaking in Minnesota yesterday, President Obama endorsed Buffett's call and argued the wealthiest Americans have an advantage when it comes to tax rates.  "You don't get those tax breaks. You're paying more than that.  Now I may be wrong, but I think you're a little less wealthy than Warren Buffett. Now that's just a guess."

In a Financial Times articleon how Buffett's remarks are "energizing" the tax debate, a representative of the nonpartisan Tax Policy Centersays the rich do pay higher taxes than the poor, "particularly if the impact of corporate taxes, estate taxes and investment taxes are counted in the mix."

In a New York Times article taking a Closer Look at Taxes on the Rich, a TPC economist says Buffett's proposal isn't "going to solve the long-term budget shortfall all by itself.  The only way to do that is to have broader tax increases or reduce entitlements.  But it could be an important part of the puzzle."

Tech Crunch's Michael Arrington writes inScrew the Rich (Here's How)that Buffett's op-ed is a "huge pile of manipulative garbage."  He says the super-rich don't mind higher tax rates, because there are no taxes on the wealth they've accumulated, only on the additional money they bring in each year:

"Buffett is just fine with big new taxes on the rich because those taxes never touch all the under-taxed wealth he’s accumulated over the decades. He talks about how he’s benefited for decades by being under taxed, but is only willing to pay more in the future. That’s like a steroids-ridden baseball player declaring that steroids are bad and from now on no one gets to take them. But paying for past sins? Shhh."

Arrington argues that Buffett wouldn't be as enthusiastic about a "wealth tax."

It's not all negative.  Writing on the Huffington Post, Chuck Collins says, "We need more wealthy folks like him to speak up for taxing the wealthy."  He links to Patriotic Millionaires for Fiscal Strength.

And in a light-hearted Washington Post blog post headlined Warren Buffett Strikes Gold, Alexandra Petri (who puts the 'pun' in punditry) writes, "If the overwhelming (positive) social response to Warren Buffett’s piece in the Times ... has showed us anything, it is that we agree with Warren Buffett that Warren Buffett has too much money, and that we don’t know how to spell his name." (Spelling link added)

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