This editorial will appear in Thursday’s print edition.
Warren Buffett considers it a crying shame that he only paid $6.9 million in income tax last year.
In an opinion piece Monday in The New York Times, the billionaire notes that he paid only 17.4 percent of his taxable income – while the tax burden of people who worked in his office averaged 36 percent.
The tax breaks he and his fellow rich Americans enjoy should end, Buffett says, as part of the “shared sacrifice” all of us will have to make if we are to pull the national economy out of its debt crisis. While the poor and middle class fight in Afghanistan, and average Americans struggle to make ends meet, it’s not right that the mega-rich continue to enjoy tax rates that have declined over the past 20 years, he wrote.
Some high-ranking Republicans have criticized Buffett for saying the rich are being “coddled” by Congress and should pay higher taxes. And online commenters make the point that no law is needed for Buffett to pony up more in taxes; he can just write a check for what he thinks is a fairer amount.
Sure, but unless he’s joined by all the other rich folks, it won’t put much of a dent in the federal deficit. Addressing the tax breaks the superrich enjoy should be on the table as the congressional super committee looks at long-term solutions to the debt crisis. The sacrifices can’t just come from education, defense, infrastructure investment, entitlements and social programs that help the most vulnerable.
Buffett isn’t the only rich guy trying to use his wealth as a bully pulpit. Starbucks CEO Howard Schultz was so disgusted with the partisan gamesmanship in D.C. over the debt crisis that he’d like to see the politicians’ life blood – campaign donations – cut off until they shape up. He’s trying to convince his fellow CEOs to follow his example of not donating to national campaigns until compromise is reached on a fiscally responsible long-term debt and deficit plan.
Schultz, whose political donations in the past have heavily favored Democrats, will probably have as much luck stopping the flow of cash as Buffett would have getting his fellow billionaires to voluntarily tax themselves more. Still, it’s worth a shot.
Few things will get politicians’ attention more quickly than the threat of donations drying up – which would help level the playing field for any challengers. The big-money givers make up a disproportionate share of campaign donations. Less than 1 percent of Americans give more than $200 to candidates, parties or political action committees, yet those donations account for almost 65 percent of all contributions. These are not the people politicians want sitting on the sidelines when it comes to campaign donations.
If a threat like Schultz’s helps nudge lawmakers toward compromise – the kind of shared sacrifice that Buffett is pushing for – then it’s well worth supporting.