Is Buffett's Tax for the Super-Rich a Fair Proposal or Class Warfare? 6 Answers
Left, right or center, everyone has an opinion about Warren's big idea.
Nobel Prize-winning economist Paul Krugman has been a key figure in the progressive camp throughout this debate, and in this New York Times column, he says that the Buffett tax rule is not class warfare, noting that because of a combination of government policies, the weakening of unions and financial deregulation, there's been an explosive growth in income for the super-rich since 1979, while the middle class's income growth in the same period has been much slower. Therefore, even if there is class warfare, it is not the wealthy who are the losers. Says Krugman:
On one side, we have the claim that the rising share of taxes paid by the rich shows that their burden is rising, not falling. To point out the obvious, the rich are paying more taxes because they're much richer than they used to be. When middle-class incomes barely grow while the incomes of the wealthiest rise by a factor of six, how could the tax share of the rich not go up, even if their tax rate is falling?
Head to the New York Times for the rest.
The Social Contract Argument
Elizabeth Warren became the Rebecca Black (i.e. internet sensation) of the political world last week when a video of her on the Senate campaign trail in August was posted on YouTube and quickly went viral. In the video, Warren also rejects the idea that a Buffet tax rule would be class warfare. She points out that the rich have benefited and prospered from an implicit national social contract, which creates the right environment and society for success, and so they should pay higher taxes. From her speech:
"You built a factory out there? Good for you," she says. "But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did."
She continues: "Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along."
CBS News has more.
The Buffett's-Not-Telling-The-Whole-Story Argument
In a short editorial published Tuesday, the Wall Street Journal defended Buffett's right to his opinion on tax rates, but the paper questioned the billionaire's claim that he was taxed less than the middle class. Citing data from the Internal Revenue Service, the Journal said that millionaires typically have effective tax rates two or three times higher than those of people earning under $100,000, contradicting Buffett's example.
But the opportunity to educate the public would be even greater if Mr. Buffett would let everyone else in on his secrets of tax avoidance by releasing his tax returns. Going only by Mr. Buffett's unverified claims, his federal taxes in 2010 amounted to 17.4% of his taxable income, probably because much of his income was from capital gains and dividends. It's also likely that he took significant deductions for charitable donations. No doubt the millions of Americans who could end up paying more because of this claim would love to see the details.
See the Wall Street Journal to keep reading.
The "Why Pay More Into a Broken System?" View
Forget the debate on whether or not Buffett's suggested tax hike for the rich is a good idea, says CEO of the American Council for Capital Formation Mark Bloomfield, because the crushing US fiscal problem is a result of a broken tax system, which needs fundamental reform. Writing at Politico, Bloomfield calls for a flatter consumption tax instead of the current progressive income tax, claiming that it will stimulate investment and growth.
Perhaps it's noble for these wealthy elite to offer to pay more than the fair share that they already contribute. The crushing debt and fiscal imbalance that our nations face is going to require everyone to sacrifice more, but Buffett and his European counterparts are wrong on a fundamental point. We should not be looking at paying more into the broken systems that have left us deeply mired in unemployment, wiped out nest eggs and have led many to lose confidence in our democratic institutions and their own individual future. A sobering Gallup Poll released earlier this year found that only 44% of Americans believe it is "likely" that today's young people will "have a better life than their parents, with better living standards, better homes, and better educations.
For more, click here.
The "What's Up With the Poor, Poor, Rich and Wealthy in this Country?" Argument
Jon Stewart hosted Bill O'Reilly on The Daily Show yesterday evening, and the topic of America's tax policy was high on the agenda. In the first clip below, Stewart sums up his attitude toward Obama's economic agenda, which would the raise the tax rate for America's wealthier classes. For Stewart's take on Warren Buffett's original op-ed piece, click on the second video.
|The Daily Show With Jon Stewart||Mon - Thurs 11p / 10c|
|Exclusive - Bill O'Reilly Extended Interview Pt. 1|
|The Daily Show With Jon Stewart||Mon - Thurs 11p / 10c|
|World of Class Warfare - Warren Buffett vs. Wealthy Conservatives|
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