Warren Buffett Says, Stop Coddling the Super Rich!

Warren Buffett wrote a NY times oped piece titled, “Stop Coddling the Super Rich.” He then spent an hour with Charlie Rose explaining his reasons for suggesting tax rate increases on the wealthiest Americans.

Our leaders asked for “shared sacrifice” but when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They too were left untouched… We mega-rich continue to get our extraordinary tax breaks.

Charlie Rose Speaks with Warren Buffett

Best Quotes from Warren Buffett Interview with Charlie Rose

In a very high percentage of cases the very rich are paying less in taxes (percentage rate) than the people who clean their offices.

We have to [cut spending], Charlie… Even a rich country has limits. We have promised things we can’t delivery on.

What I propose would not touch the taxes of 99.7 percent of the American public.

The payroll tax accounts for almost as much revenue to the Federal government as the income tax.

If you make money with money you get taxed at very low rates.

The poor don’t pay taxes. There are 80 million tax payers. The high rates are falling on the middle class.

I have never had one person decline to invest with me (based upon the capital gains tax rate).

I think fairness is important and getting rid of promises you can’t keep is important.

This is the time to do it. If we don’t do it now, the American people have had it.

The country will still come through. We’ll rise to whatever the occasion demands.

We can print money. There are 17 countries in Europe that gave up the right to print money…and now they have terrible problems because they can’t print money.

The [economy] won’t come back until we’ve worked off the excessive housing inventory.

Unemployment will fall dramatically when we get back up to one million housing starts.

We’ve recovered our corporate profits and our banks are in good shape now.

When home construction is at 1 million or more we’ll be at 7% unemployment.

This is a huge correction of a bubble that has popped.

Capitalism is solving this (economic crisis).

We have households being formed every day… We’re forming them a lot faster than we’re forming homes.

The American system works, it works terrifically. It has occasional recessions, we’ve had 15 of them since the country was formed and this was a particularly bad one because we had a bubble in the biggest asset.

[Compared to China and Europe over the past 200 years...] We weren’t smarter, we didn’t work harder, we didn’t have greater natural resources — we just have a system that worked.

The world isn’t a zero sum game.

As your income grows, population grows, your wealth grows, you can handle more debt, but you can’t keep letting it increase as a percentage of your income, which is what we’ve been doing.

We’ve got the world’s biggest stimulus problem… The (fiscal) deficit is our stimulus… The stimulus is the government pouring more money out than it is taking in.

There are only two things (that could cause a double dip recession). If people lose so much faith in the workings of government and if somehow the trouble in Europe spills over here.

The law is a shield not a sword.

This is a world of incentives. We work on them in every place.

I don’t have a tax shelter. I’ve never had a tax shelter.

That (increased taxes on the top .3%) doesn’t solve everything, it would be tops $50 billion a year. This doesn’t close the gap.

The (election) Primaries push people to the extremes.

It ($32,680 in social security benefits) gets deposited in my bank account without me even knowing about it.

I was born lucky. I was born in the United State of America. I was born wired for capital allocation. I won the ovarian lottery the day I was born. A lot of people don’t.

This country works wonderfully on market systems… It works with equality of opportunity.

There are two things that are needed to keep the financial system from going crazy. One is some limits on leverage… Having the proper incentives for people at top of important financial institutions.

You have to have downside for people who run important financial institutions. We need those incentives.

Too big to fail will always exist. There will always be institutions that are too big to fail. We decided that the whole system is too big to fail when we put in the FDIC.

I like buying on sale… I don’t like bidding wars.

It was economic Pearl Harbor. We had a shock to the system that was really colossal. If a few people hadn’t acted right it would have even been more so.

17 countries in Europe gave up their right to print money. That was a huge, huge mistake. I hope the United States never does it.

Europe won’t go away, the farm land and plants won’t go away. It is just going to be an economic mess for a while.

I’ve made plenty of mistakes, I expect to make mistakes, and I’ll keep making mistakes. Mistakes are part of the game.

This country is a monument to what was done a few hundred years ago and the people who followed.

Notes

Buffett states that the purpose of his proposal is to more equally divide the tax burden across the American population. He knows that higher taxes on just a few thousand super rich people wouldn’t reduce the federal fiscal deficit but it would communicate to the American people that everyone was paying their fair share and the rich weren’t using their influence to exclude themselves from a reasonable tax burden.

He notes that future promises (entitlements like social security and medicare) will have to be reduced because there isn’t money to pay for them.

He wants to immediately raise taxes on incomes over 1 million (200,000+ taxpayers), and over 10 million (8000+ taxpayers)

In a show for real transparency, Warren Buffett even brought his personal tax return to show and discuss.

He believes the US shouldn’t give up the right to print its own money and the country will never default on its debt because it will print the money necessary to pay its obligations.