Warren Buffett is calling. We need more wealthy folks like him to speak up for taxing the wealthy.
Billionaire super-investor Warren Buffett has done it again. The Oracle of Omaha has made a bold and revealing statement about "taxing the wealthy." In his op-ed in Monday's The New York Times, Buffett wrote, "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."
Buffett revealed that his own effective tax rate -- the percentage of his income that he actually pays -- is far below his co-workers, thanks to how investment income is taxed at lower rates. Buffett pays an effective rate of 17.4 percent, whereas most middle and upper income individuals pay over 30 percent of their income. He revealed one of the dirty secrets of tax policy -- the privileged treatment of income from wealth over income from work and wages.
We now need ten thousand more like Warren Buffett to speak up, people with incomes over $250,000 that know in their hearts that they should pay more.
Of course, we need an engaged public -- people in the bottom 98 percent -- to mobilize and press for tax increases on the wealthy before any further budget cuts. But enlisting the voices of wealthy people for the common good is a key part of the strategy to change the political dynamics.
The good news is there are already several thousand who have stepped forward and spoken up. Several hundred business leaders and wealthy individuals have joined Patriotic Millionaires for Fiscal Strength, a joint initiative of the Agenda Project and Wealth for the Common Good. On June 7, the tenth anniversary of the Bush Tax Cuts for the wealthy, they issued a powerful video calling on Congress to let the tax cuts expire.
These folks, in the top 2 percent of income and wealth holders, eloquently make the case that they have benefited from the generations of public investments that made their wealth possible. They celebrate the fertile soil we have created together in U.S. society for business and wealth creation and believe they have an obligation to future generations to pay their taxes so that others have the same opportunity.
Almost 500 high-income taxpayers support the Fairness in Taxation Act, that would increase top tax rates on millionaires, generating an additional $78 billion in urgently needed revenue. This legislation would also tax both capital gains and wage income over $1 million at the same rates. It would eliminate the "carried interest" loophole that enables billionaire hedge fund managers to have their income taxed at a low 15 percent. This legislation would eliminate the economic distortions that come from taxing income from work at twice the rate as income from wealth and investments.
There are now thousands of business leaders and wealthy investors calling on Congress to stop aggressive tax corporate dodging. They point out that it is bad for business when companies like General Electric and Verizon pay no taxes -- and force patriotic domestic companies to compete on an unlevel playing field.
In early July, Senator Carl Levin reintroduced the Stop Tax Haven Abuse Act. At a press conference Senator Levin was joined by spokespeople from Business for Shared Prosperity and the Business and Investors Against Tax Haven Abuse campaign. Rep. Lloyd Doggett introduced a version in the House.
Polls show that the public supports raising taxes on millionaires and closing offshore corporate tax shelters as part of getting our fiscal house in order. Yet the Tea Party Republicans have pledged to destroy the economy before raising taxes on their rich patrons. The bottom 98 percent needs to get organized -- in mobilizations like the "Other 98 Percent" -- to press for tax fairness. But it will enormously help the cause to have more of those who will pay these taxes step forward and speak up.
In our organizing work at Wealth for the Common Good, we share Warren Buffett's view that many of the rich "love America and appreciate the opportunity this country has given them... Most wouldn't mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering."
Polls show that wealthy people know the tax code is getting less fair and is out of balance. But many of them -- like the population as a whole -- don't feel the intensity about tax fairness that they feel about other pressing matters such as education, children's health, and ecological degradation. Very few people of any economic class feel passionately about tax fairness -- to the point where we are politically engaged.
Now is the time for all of us to understand how important this tax debate is -- and that everything we care about is under attack by the current drift in politics. We have to get real fired up about tax fairness.
Revenue must be on the table as part of debt and budget debates in the coming months. Congress must let the Bush tax breaks for the wealthy expire, increase top tax rates for millionaires, and eliminate aggressive corporate tax dodging.
Right now, our silence is consent to the status quo of budget cuts and unequal sacrifice. We need millions of ordinary citizens to speak up. And to compliment this, we need tens of thousands of our nation's business leaders and wealthy individuals to speak out.
The alternative is austerity for everyone but the rich -- and a growing economic apartheid in America.