Issue of the week: Should the super-rich pay more?

last updated 8 January 2015

Raise my taxes, please, said Warren Buffett in The New York Times. My mega-rich friends and I “have been coddled long enough by a billionaire-friendly Congress.” Last year, I paid about $7 million in taxes—a lot of money, to be sure, but it was only 17.4 percent of my taxable income. By contrast, my less-wealthy office colleagues paid an average of 36 percent. Washington treats us super-rich as if higher taxes will paralyze us, but I have never seen anyone “shy away from a sensible investment because of the tax rate on the potential gain.” What I have seen is my rich friends’ tax bills falling, from an average of 29.2 percent in 1992 for the 400 richest Americans to 21.5 percent in 2008. Congress should raise taxes immediately on those making more than $1 million a year, and let all of us take part in this time of “shared sacrifice.”

If you are so eager to pay higher taxes, Mr. Buffett, feel free to “simply write a big check to Uncle Sam,” said The Wall Street Journal in an editorial. You’ve resorted to “intellectual tax dodges” such as sheltering the bulk of your fortune in a charitable foundation. It’s generous to give away money, but why not to the IRS? And please don’t call me coddled, said former American Express CEO Harvey Golub, also in The Wall Street Journal. I earned my money and have given plenty of it to the government. This year, “I expect to pay 80 to 90 percent” in taxes all told, including estate taxes. If Washington reforms anything, it should be to require even low earners to pay income taxes. And the government should spend the money it does raise more wisely, instead of dishing it out to interest groups, political cronies, and programs that don’t work.

Buffett “knows what he is saying is bunk,” said Conrad Black in National Review. If all his rich friends were taxed at 50 percent, the federal deficit would go down, at most, “one third of one percent,” and they’d engage in more creative tax avoidance. They wouldn’t if the same top rate applied to income of all origins, said The Washington Post. Congress should take a page out of Ronald Reagan’s book and close the tax gap between capital gains, which are now taxed at 15 percent, and ordinary income taxed at 35 percent. That would make for a more “fair, efficient system,” something “all Americans—from plutocrats to the poverty-stricken—could support.”