Why Bill Gates and Warren Buffett are right



Bill Gates and Warren Buffett, the richest and second richest Americans, have said they are willing to see their income tax rates revert to 1990s levels in order to help bring the federal government’s budget into a better balance.

Someone near and dear to me, whose good sense in most matters I respect, sneered at Gates and Buffett.  He said that if they think they are undertaxed, they are free to donate the excess to the government, but that’s no reason why taxes on the rest of us should go up.

But taxes are not a charitable contribution.  They are an obligation.  What the government spends that isn’t paid by Bill Gates and Warren Buffett will have to be paid by you and me, and what isn’t paid by you and me will have to be paid by future generations.



CBPP stands for Center for Budget and Policy Priorities, a Washington, D.C., think tank.  Obviously the future in unknowable and the projection is a best guess.  To the extent that the United States can generate a high-wage, full-employment economy, the governmental budget problems may be easier to deal with.  But CBPP’s basic point is correct.  Changes of just a few percentage points in the top income tax rates will have a huge effect on federal government budget.

During President Bush’s administration, income taxes were cut across the board, but it was the reductions in taxes on the upper bracket payers, plus the wars in Iraq and Afghanistan, that did the most to throw the budget out of balance.  However, I’d be willing to see my own taxes revert to 1990s levels to show I’m willing to do my fair share and not put the whole burden on millionaires and billionaries.



Click on History of Federal Income Tax Brackets for a National Taxpayers Union chart showing the history of federal income tax rates in the lowest and highest brackets.

Click on Center for Budget and Policy Priorities for the CBPP home page.

Click on The World’s Richest People for a list of the world’s 50 richest billionaires.

Click on Warren Buffett on Taxes for Buffett’s argument. [Added 10/8/10]






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