Tuesday, November 23, 2010

Buffett says rich people should pay higher taxes

By Juliann Neher

Bloomberg News

WASHINGTON — Billionaire Warren Buffett said that rich people should pay more in taxes and that Bush-era tax cuts for top earners should be allowed to expire at the end of December.

"If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further," Buffett said in an interview on ABC's This Week With Christiane Amanpour that is scheduled to air next Sunday. "But I think that people at the high end — people like myself — should be paying a lot more in taxes. We have it better than we've ever had it."

House Speaker Nancy Pelosi plans to take up President Barack Obama's plan to extend some of the tax cuts enacted under President George W. Bush when the House returns after Thanksgiving. The legislation would retain lower tax rates and increased credits that apply only to the first $250,000 of a married couple's gross income or $200,000 of a single person's.

Unless Congress acts, income tax rates will rise across the board, tax credits that benefit families will be slashed, and tax rates on capital gains and dividends will increase.

"The rich are always going to say that, you know, just give us more money and we'll go out and spend more and then it will all trickle down to the rest of you," Buffett, chief executive officer of Berkshire Hathaway Inc., said in the interview. "But that has not worked the last 10 years, and I hope the American public is catching on."

House Democratic Leader Steny Hoyer didn't rule out backing a temporary extension of the Bush tax cuts for households earning more than $250,000 a year. He said Sunday he plans to discuss the matter with Obama.

"I'm certainly going to talk to him about how we move the ball forward," Hoyer said on the CBS Face the Nation program.


Joe Nuno said...

Report: Deficit Commission Proposals Would Cost 4 Million Jobs

by James Parks, Nov 23, 2010
The deficit reduction plan released last week by the co-chairmen of the National Commission on Fiscal Responsibility shows that this so-called budget deficit commission shows the commission has run severely off course.

The recommendations issued by co-chairs Alan Simpson and Erskine Bowles would cost 4 million jobs over three years and reduce economic growth by 0.7 percent in 2012, 1.4 percent in 2013 and 1.9 percent in 2014, according to an analysis by the Economic Policy Institute (EPI).

The Simpson-Bowles approach calls for job-killing budget austerity to begin in October 2011, even though most economic forecasters expect unemployment to remain as high as it is today or even increase by then.

Simpson and Bowles also call for deep cuts in Social Security benefits, even though Social Security is not responsible for our long-term budget problem and the public is overwhelmingly opposed to benefit cuts.

Simpson and Bowles also propose more cost-sharing in Medicare. They suggest lowering top income tax rates for the wealthiest Americans and for corporations and eliminating the Alternative Minimum Tax (AMT), while sparing Wall Street from any taxes on bonuses or financial speculation.

Bowles collects $335,000 a year as a director of Wall Street investment bank Mor gan Stanley, and Simpson has called Social Security “a milk cow with 310 million tits.”

AFL-CIO President Richard Trumka said Simpson and Bowles “just told working Americans to “Drop Dead.”

Especially in these tough economic times, it is unconscionable to be proposing cuts to the critical economic lifelines for working people, Social Security and Medicare. Some people are saying this plan is just a “starting point.” Let me be clear, it is not.

In the EPI report, economists Josh Bivens and Andrew Fieldhouse note that because the Simpson and Bowles recommendations would reduce economic growth, they would end up lowering the deficit far less than Simpson and Bowles claim.

Bivens and Fieldhouse say the co-chairs’ proposal “threatens to increase the already unacceptably high level of unemployment and increases the possibility of the economy falling back into outright recession.”

They argue a better path to fiscal responsibility would be to invest in job creation and growth to increase revenue in the near-term, raising revenue from new sources over the medium-term to stem the hemmoraging caused by the Bush-era tax cuts for the very well-off, and reforming the health care provision to generate long-run budgetary savings. Otherwise, Bivens and Fieldhouse say:

In the present economic environment, the near-term austerity measures proposed by the co-chairs would be fiscally counterproductive and crippling to states, communities, and families, delaying a robust economic recovery for years.

Mario said...

Looks like some bazillionaires are joining Warren Buffet in urging that Bush-era tax cuts for the wealthiest expire at the end of the year.

Calling themselves “Patriotic Millionaires for Fiscal Strength,” more than 40 of the nation’s wealthiest individuals wrote an open letter to President Obama urging him to “allow tax cuts on incomes over $1 million to expire at the end of this year as scheduled.”

We have done very well over the last several years. Now, during our nation’s moment of need, we are eager to do our fair share. We don’t need more tax cuts, and we understand that cutting our taxes will increase the deficit and the debt burden carried by other taxpayers. The country needs to meet its financial obligations in a just and responsible way.

The U.S. public agrees. A new survey out today shows 51 percent of registered voters want Congress to extend the tax cuts only for households making less than $250,000 a year.

As Joe Conason reminds us, the Patriotic Millionaires campaign came out the same day as a new study showing that half of the members of the House and the Senate are millionaires—and many of those millionaires want our tax money to go to their tax breaks. And some of these congressional millionaires also say we can’t afford to maintain unemployment insurance for long-term jobless workers in the worst economic morass since the Depression.

The Patriotic Millionaires site notes that ”letting tax cuts for the top 2 percent expire as scheduled would pay down the debt by $700 billion over the next 10 years.” That’s real money—money the nation’s more than 16 million jobless workers certainly don’t have to hand over to the 375,000 people who make more than $1 million a year.

The site notes that in 1963—when prosperity in the United States was far more widespread—millionaires had a top marginal tax rate of 91 percent. Today, millionaires have a top marginal tax rate of 35 percent.

The millionaires who signed on this letter are indeed patriotic—and others in that income bracket should show their red, white and blue colors as well

Joe Nuno said...

Companies Sit on Record Profits While Millions Are Jobless

by James Parks, Nov 29, 2010 While nearly 27 million U.S. workers are either jobless or in need of full-time work, America’s corporations are sitting on record profits that could be used to put people back on the job.

This irony is especially cruel for the 2 million workers who will lose their unemployment benefits by the end of the year because corporate America’s Republican friends in Congress blocked an extension of unemployment insurance (UI) benefits for people who have been jobless for six months or more.

The U.S. Department of Commerce reported last week that American companies just had their best quarter ever, earning profits at an annual rate of $1.659 trillion in the third quarter. The next-highest annual corporate profits level on record—$1.655 trillion—was in the third quarter of 2006. In fact, American corporate profits have grown for seven straight quarters at some of the fastest rates in history.

Economists says the record profits can be attributed to strong productivity growth—companies making more with fewer people—and to companies spending the money in—and sending jobs to—fast-growing countries such as China and India. As a result of the Federal Reserve’s consistent long-term lowering of interest rates, corporations have rarely had it better, they say.

Consumer spending and the American Recovery Act have fueled what little growth there has been in the U.S. economy, says Heidi Shierholz, an Economic Policy Institute (EPI) economist. One of the key engines growing the economy is extended UI benefits, she said.

Writing in The Huffington Post earlier this month, Shahien Nasiripour says banks are loaded with cash as well. Through September, banks had $981 billion in excess reserves at the 12 regional Federal Reserve banks across the country, Fed data show. In August 2008, right before the financial system nearly imploded, banks had just $1.9 billion in excess reserves.

Read Nasiripour’s article, “Federal Reserve Rains Money On Corporate America—But Main Street Left High And Dry.