Warren Buffet has it wrong!
What Warren said about the need to raise taxes on the Rich is wrong.
For starters, check out this report from the Treasury from two years ago.
DEPARTMENT OF THE TREASURY
Office of Public Affairs
March 2, 2005
FACT SHEET:
Who Pays the Most Individual Income Taxes?
The individual income tax is highly progressive – a small group of higher-income taxpayers pay most of the individual income taxes each year.
• In 2002 the latest year of available data, the top 5 percent of taxpayers paid more thanone-half (53.8 percent) of all individual income taxes, but reported roughly one-third(30.6 percent) of income.
• The top 1 percent of taxpayers paid 33.7 percent of all individual income taxes in2002. This group of taxpayers has paid more than 30 percent of individual incometaxes since 1995. Moreover, since 1990 this group’s tax share has grown faster than their income share.
• Taxpayers who rank in the top 50 percent of taxpayers by income pay virtually all individual income taxes. In all years since 1990, taxpayers in this group have paid over 94 percent of all individual income taxes. In 2000, 2001, and 2002, this grouppaid over 96 percent of the total.
The President’s tax cuts have shifted a larger share of the individual income taxes paid tohigher income taxpayers. In 2005, when most of the tax cut provisions are fully in effect(e.g., lower tax rates, the $1,000 child credit, marriage penalty relief), the projected tax share for lower-income taxpayers will fall, while the tax share for higher-income taxpayers
will rise.
• The share of taxes paid by the bottom 50 percent of taxpayers will fall from 4.1 percent to 3.6 percent.
• The share of taxes paid by the top 1 percent of taxpayers will rise from 32.3 percent to33.7 percent.
• The average tax rate for the bottom 50 percent of taxpayers falls by 27 percent ascompared to a 13 percent decline for taxpayers in the top 1 percent.
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Click Here to see the whole report from the Treasury.
I like Warren Buffet a lot. He is why we go after 21.5% returns here at I Am An Investor. I really do like him, but the answer to current economic woes is not taxing the Rich even more as he suggested. They are paying far more than their fair share now as you can see above. The money they keep gets used to actually produce things, and finance companies. Whereas if this money is given to the government, it will be just flushed down the proverbial toilet of wasteful government spending.
The problem is that Government Spending is out of Control. They are like a crack addict. Tax Revenues, the money that they take from you is hitting all time record highs and yet their spending increases are going up at about a 10% clip each year. This needs to stop!
Plus it has been proven beyond a shadow of a doubt that when the median tax rates are lowered, tax revenues actually increase Warren. Come on, you ought to know this, your companies make money by charging the least amount and delivering value. Companies have sales when they want to have more money coming in. It is the same with taxes and this has been proven for hundreds of years.
That is why you say in your message to your stockholders that Geico offers lower priced Insurance, not higher.
So, the answer to what is going on in the Economy is not raising Taxes. That would be foolish. It is about lowering the size of government, spending less than we take it in.
Giving money and power to government is like giving whiskey and car keys to teenage boys.
P. J. O’Rourke
And to paraphrase P.J. further “Giving a printing press to politicians is like giving a distillery to incurable drunkards.”
So there you have it. Warren, you might want to rethink what is really going on. I love you and what you have done, but you might want to suggest they cut spending first.
Oh and of course if you really think rich people should pay more taxes and that will solve the problem, why don’t you just right a check to the Treasury department yourself, say for 10 Billion if that will make you feel better?
This could lead to a voluntary windfall of rich people giving the government more money and any leader of a movement that actually does what they preach is sure to gain more followers. Then we can take a look at the data and see if what you suggest really works.
In fact, if you do this, we can find out in the next few months. I could be wrong and you could be right.
