Monday, November 26, 2012

Warren Buffett wants A Minimum Tax for the Wealthy

This is something I've been thinking a good deal about recently. I've been picking the brains of friends about taxation rates with an eye toward bring equity to Federal taxation. It occurred to me that a minimum tax on the income of the very wealthy was probably the easiest and cleanest way to do this. I was thinking of 30% for all income (from any source) above $1 million, but I will go along with Warren.

Warren begins by outlining the incredible and growing disparity of income between the very wealthy and working people, and then offers an equitable solution, to wit,
...we need Congress, right now, to enact a minimum tax on high incomes. I would suggest 30 percent of taxable income between $1 million and $10 million, and 35 percent on amounts above that. A plain and simple rule like that will block the efforts of lobbyists, lawyers and contribution-hungry legislators to keep the ultrarich paying rates well below those incurred by people with income just a tiny fraction of ours. Only a minimum tax on very high incomes will prevent the stated tax rate from being eviscerated by these warriors for the wealthy.

Above all, we should not postpone these changes in the name of “reforming” the tax code. True, changes are badly needed. We need to get rid of arrangements like “carried interest” that enable income from labor to be magically converted into capital gains. And it’s sickening that a Cayman Islands mail drop can be central to tax maneuvering by wealthy individuals and corporations.

But the reform of such complexities should not promote delay in our correcting simple and expensive inequities. We can’t let those who want to protect the privileged get away with insisting that we do nothing until we can do everything.

No comments: