Republicans bluntly criticised President Obama’s long-term deficit reduction plan, with Paul Ryan, who chairs the House of Representatives budget committee, describing it as ‘class warfare’. In a June 19th interview with Lou Dobbs, Warren Buffett said the following, “It’s class warfare; my class is winning, but they shouldn’t be. The rich people are doing so well in this country. I mean, we never had it so good. I personally would increase the taxable base above the present $90,000.” In a later op ed with The New York Times, Mr. Buffett elaborated, repeating his statement about class warfare, declaring that his class had started it. President Obama has stated that he wants a ‘Buffett Rule’ which would cause Americans who earn more than $1million pay the same share of tax as those who earn less. This is not a tax increase. It is equilibration. Moreover, it would only affect those who would not even notice its impact; taxing the greedy, to feed the needy. One rationale the President has hoped to deploy is treating all income equally. Why should the investor class pay a lower tax rate on their capital gains, than a construction worker pays on money he has earned with his labour? Mr. Buffett continued in his interview with Lou Dobbs, “I pay very little in the way of taxes but the people in my office pay the full tax.” In another interview, Warren Buffett stated that many people in the investor class were good, decent people, and would not object to paying more taxes, their fair share. It is a simple lesson in US history. During the Eisenhower administration, the ultra rich paid taxes at a much higher rate than they do now. To avoid giving all of their income to the government, this class re-invested in their businesses, causing the economy to grow. Since the Reagan administration and its love affair with ‘trickle down economics’ and its tax cuts, followed by the Clinton administration’s reduction in trade barriers, and tax cuts allowed by both Bushes, the rich have done very well, indeed. Meanwhile, and exacerbated by job outsourcing, the American economy has slid down a slippery slope towards depression. John Boehner said any tax increases were ‘off the table’. As a spokesman for House Speaker John Boehner, Michael Steel is quoted as saying, “It is disappointing the president has nothing but a fresh slogan for the same job killing small-business tax hikes opposed by bipartisan majorities in Congress”. The partisan spin must stop. The question stands like the gorilla in the middle of the room: “If Warren Buffet and many people in the investor class would not object to paying their fair share of taxes, who do the Republicans truly represent?” What small minority of the population are Mr. Boehner and his colleagues coddling while the vast majority of the American population suffers? No, fairness in taxation is not the same as a tax increase. Mr. President, I would urge you to indeed close tax loopholes which allow capital gains to be assessed at a different rate than a paycheck. I would encourage you, furthermore, to remove the cap on FICA, as well, so that all Americans contribute equally to Social Security. Reinstitute the old tariff system, which worked well since the days of Alexander Hamilton. Abandon the Reagan and Bush tax schedules, and return to those of President Dwight D. Eisenhower, who was, after all, a Republican!
- Obama to propose ‘Buffett Rule’ on taxes: reports (marketwatch.com)
- ‘Class Warfare’: Republicans Blast Obama’s ‘Buffett Rule’ (abcnews.go.com)