Billionaire investor Warren Buffett has a message for Washington. So does Starbucks CEO Howard Schultz. Both are creating a stir in political as well as corporate circles, and both are worth recapping here.
First, Buffett: In a New York Times oped, he calls for higher tax rates on the richest Americans. ěFor those making more than $1 million,î he writes, ěraise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains.î Those making $10 million or more should see a second increase, he recommends.
ěMy friends and I have been coddled long enough by a billionaire-friendly Congress,î Buffett says. ěItís time for our government to get serious about shared sacrifice.î
Buffett noted the ěmega-richî pay income taxes at a rate of 15 percent on most investment income but a pittance in payroll taxes. The middle class, meanwhile, falls into the 15 percent and 25 percent income tax brackets and shoulders heavy payroll taxes. He said Washington legislators ěfeel compelled to protect us, much as if we were spotted owls or some other endangered species.î
His oped drew predictable reactions from left as well as right. The White House, which opposed extension of the Bush tax cuts, seconded Buffettís remarks, while over at MSNBC, Pat Buchanan asked, ěWhy doesnít he set an example and send a check for $5 billion to the federal government?î Other commentaries raised the oft-cited statistic that the top 1 percent of income earners already pay about 40 percent of all income taxes, according to recent IRS tabulations.
Buffett is no hypocrite; heís pledged to give away most of his wealth to nonprofit foundations and urged others to do the same. Itís not much of a stretch to suggest he has more credibility than our political leaders. He also has a far better track record in balancing the books and recognizing longterm value. From this and prior statements, heís made it clear he doesnít view taxes as an obstacle to economic growth or a scheme to redistribute wealth but a necessary investment in the nationís future.
Meanwhile, Schultz, the Starbucks boss, also jangled nerves by calling for a boycott on campaign contributions to President Obama and members of Congress until the nation regains its financial footing.
The boycott proposal followed a letter Schultz sent to his employees and other corporate chiefs. In it, he decried the ěfear and uncertaintyî gripping businesses that are reluctant to hire workers or expand. He believes the political dithering in Washington is a large part of the fear factor. Hence the call for the campaign donation boycott.
If it will mean fewer robocalls and negative political ads, sign us up.