The creator of the Laffer curve called Warren Buffett a hypocrite for urging lawmakers to raise taxes on the super-rich to cut the budget deficit.
"The hypocrisy of Warren Buffett is unfathomable," Arthur Laffer, chairman of Laffer Associates, told CNBC Thursday, referring to the Berkshire Hathaway chairman.
"If he really wanted to make (the tax code) fair, why doesn’t he propose a wealth tax on everyone over $1 billion worth of wealth of 50 percent once and for all," Laffer said. "That would really work for him, but of course he’s not going to suggest that because he would have to pay that."
Laffer said most of Buffett's wealth is in unrealized capital gains. "It’s never seen a tax, and when he gives (the investments) to the Bill and Melinda Gates Foundation, it never will. This is ridiculous," he said.
The Laffer curve shows the relationship between tax rates and tax revenue. Its creator said that if "you raise tax rates on the rich, all the evidence suggests they pay less in taxes, because they can get lawyers, accountants, deferred-income specialists. They can change the location of their income, the timing of their income, the composition, and the location. They just leave."
Meanwhile, Laffer said, the "lower-income guys, you raise their taxes and you collect more money, unfortunately. But that’s the way the world works."