So I did smile when reading Warren Buffet's statements on tax rates on the richest Americans.
While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks- Warren Buffet
Buffet claims that his average tax rate was just 17.4%. Whearas other people in his office (on much lower incomes, paid between 36-41% in tax). The reason is that those in ordinary employment have payroll taxes. Whereas 'investors' don't pay these income taxes.
He also makes the point that higher tax rates are not such a disincentive to work as some claim.
I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.Original article at NY Times - Stop coddling the rich
The US has seen a large increase in income inequality in past few decades. The number of millionaires has soared, and yet the tax rates on the highest earners has fallen.
It is an important intervention as in the US, there is this almost religious intolerance of contemplating any tax increases. (religion of tax cuts)
Maybe Warren Buffet is being altruistic, maybe he is thinking of own self-interest. The US needs a budget realignment not just from spending cuts but also tax increases. If the US is unable to take reasonable steps such as increasing taxes on the richest, if will adversely affect economy in long term.