Investor Warren Buffett puts Republican activist, Grover Norquist, in the dunce’s cap in a New York Times op-ed piece published November, 26, 2012. In addition to expanding on his federal income tax proposal, Buffett criticizes Norquist’s business savvy, calling attention to the fact that American businesses will “forever pursue investment opportunities” despite higher taxes.
Warren Buffett Dissects Norquist’s Tax Logic
With the fiscal cliff inching closer by the day, policymakers in Congress continue to find themselves at odds with each other on arriving at a solution to combat the nation’s deficit. Grover Norquist has headed the “Taxpayer Protection Pledge,” encouraging Republicans to oppose income tax rate increases. What Warren Buffett brings to light, however, is that higher taxes won’t prevent businessmen from acting on a good deal.
In the op-ed, Buffett explains that if trusted and revered investor were to approach another business-minded investor with an ingenious opportunity to earn a profit, the response below would be highly unlikely:
“Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.”
Buffett goes on to state that “Only in Grover Norquist’s imagination does such a response exist.” Instead, the investing mogul outlines how raising federal income tax on the highest earning Americans can successfully save the country from dropping off the fiscal cliff.
Buffett’s Federal Income Tax Plan
In order to regain balance in the U.S. economy, Buffett calls for a minimum tax rate of 30 percent for individuals making between $1 million and $10 million. And those who exceed the $10 million threshold should adhere to a 35-percent income tax rate.
The end of Bush tax cuts for high earners is supported by Warren Buffett. However, he proposes that those earning over $500,000 be taxed at a higher rate, rather than $250,000.
Finally, Buffett proposes that a revenue stream of 18.5 percent of GDP be maintained, as 21.5 percent of GDP is spent.
“We can’t let those who want to protect the privileged get away with insisting that we do nothing until we can do everything,” preaches Buffett. However, whether or not Congress abandons its all or nothing stance on the fiscal cliff is yet to be seen.