On Friday the Washington Examiner posted a transcript of an interview of Warren Buffett on CNBC where Mr. Buffett stated that he did not support President Obama’s new tax pollicy. Howeber, Mr. Buffett did state that Counselor to Treasury Secretary Tim Geithner had called him to ask his permission to use his name for President Obama’s new tax policy.
The transcript states:
CNBC: Does that you mean you disagree with the president’s new jobs proposal which would be paid for by raising taxes on households with incomes over $250,000?
Buffett: There is another program that I won’t be discussing. My program is to have on ultra rich people who are paying very low tax rates. Not just all the rich people. And it would probably apply to 50,000 people in a population of 300 million.
It doesn’t sound as if Mr. Buffett is totally on board with the White House. The thing to remember here is that there is only so much money you can actually get by taxing the ‘rich.’ The rich have tax lawyers and CPA’s to help them avoid paying any more taxes than they are required to pay. When the government decides it wants more money coming in and does not want to cut spending, eventually it works out that the middle class pays more taxes because that’s the tax bracket that encompasses the majority of Americans. The best example of that is the Alternative Minimum Tax (AMT) which was originally only supposed to impact a very small number of Americans. In 1970, only 19,000 taxpayers owed an AMT. It is now estimated by the Congressional Research Services that if the cuts to the regular income tax are made permanent, the number of taxpayers subject to the AMT will increase from about 1.8 million in 2001 to over 41 million by 2013. We need to remember as the President’s tax proposals are debated, that even when we are told that taxes are only going to impact the rich, they eventually impact the rest of us. New taxes are always a bad idea. Fiscal responsibility on the part of Congress and the President is what is needed.