During President Obama’s State of the Union address he paraphrased a quote from President Abe Lincoln: The government should do for people only by what they cannot do for themselves and no more.
His ode to Lincoln got me thinking about a multitude of things, but specifically the upper, upper class and the tremendous tax breaks they receive.
Much attention has been placed on presidential candidate Mitt Romeny and the release of his tax returns. Once his returns were released, the public learned that he and his wife’s adjusted gross income for 2010 was $21.7 million, of which they paid an effective tax rate of 13.9 percent. The average tax rate of someone making less than $250,000 could be between 10 and 33 percent. So although the Romney’s make far more money than most Americans (the Romney’s are not just in the top 1 percent of America’s highest earners, they are actually in the top 0.006 percent), they still pay fewer taxes than me and most people reading this editorial.
Is that completely fair?
Because I make far less money than Romney, I may not be the best person to determine whether the amount he pays in taxes is reasonable or not. But I know of someone who can: Warren Buffett.
As the third richest man in the world, I can attest that Buffett understands a thing or two about money. And though I have not personally asked him his opinion on Romney or any other uber-rich individuals; Buffett has unequivocally said that multi-millionaires should pay more taxes. He also told Time magazine that Washington needs to “stop coddling the super rich.”
Such a statement actually came from a man who is super rich himself. His business acumen and financial success coupled with his compassion for the least of us makes him far different than his upper-rich counterparts. He not only makes billions of dollars, he also gives lots of his money away. And when he dies, Buffett has already committed to giving 99 percent of his $45 billion fortune to charity.
I believe when a man as astute as Warren Buffett makes suggestions, we should not only listen, but also take heed. After all, being the 0.001 percent means that he’s often right in regards to matters of finance.
Buffett believes imposing higher taxes on the rich and increasing government spending on the rest will solve this country’s economic problems. He calls this methodology shared sacrifice.
This isn’t the first time such a concept has been raised. The super rich have paid higher taxes before and the economy thrived. Here are some figures to consider:
In 1986 President Ronald Reagan (a wealthy Republican) signed a tax reform that equalized top rates to 28 percent.
Democratic President Bill Clinton raised that rate to 29 percent.
When Clinton raised the tax rate, the economy added 11.5 million jobs.
Proponents say lower taxes for the wealthy helps create more jobs, but I don’t agree with this trickle-down theory because taxes have been extremely low over the past 10 years, yet job creation has been at its worst.
A theory that seems to make more sense is making the majority of people prosperous (i.e. redistribution of taxes), allowing their prosperity to spread to other classes.
I think it is great when people are successful enough to make millions and even billions of dollars. I am not hating on them one bit. However, it is unjust when those millionaires and billionaires pay taxes at a lower rate than the average American, yet they have more money (a testament of this is Warren Buffett, who pays less taxes than his secretary).
There has to be a redistribution of taxes so that the wealthy, various companies, and everyday Americans all have a fair shot at obtaining their piece of the American pie. Anything but shared sacrifice represents a callous disregard to America’s majority.
As Dr. Martin Luther King Jr. said, “It may be true that the law can’t change the heart, but it can restrain the heartless.” And in the words of President Abraham Lincoln, “The legitimate object of government is to do for a community of people whatever they need to have done, but cannot do at all, or cannot so well do, for themselves, in their separate and individual capacities.”
Congress, it is time to eliminate the vicious partisan politics and get down to handling the people’s business!
You can email comments to Shannon Williams at shannonw@indyrecorder.com.
