Warren Buffett Again Writes “Tax the UltraRich!”

Warren Buffett wrote on November 25, 2012 in the New York Times, “Between 1951 and 1954, when the capital gains rate was 25 percent and marginal rates on dividends reached 91 percent in extreme cases, I sold securities and did pretty well. In the years from 1956 to 1969, the top marginal rate fell modestly, but was still a lofty 70 percent — and the tax rate on capital gains inched up to 27.5 percent. I was managing funds for investors then. Never did anyone mention taxes as a reason to forgo an investment opportunity that I offered.

Under those burdensome rates, moreover, both employment and the gross domestic product (a measure of the nation’s economic output) increased at a rapid clip. The middle class and the rich alike gained ground.

So let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if — gasp — capital gains rates and ordinary income rates are increased. The ultrarich, including me, will forever pursue investment opportunities.”

Buffett doesn’t suggest what is obvious. Tax cuts for the rich destroy jobs, which I’ve shown how in numerous articles in this blog and in my book, The Rigged Game.

Click below for the full op-ed by Warren Buffett.

Warren Buffett Writes "Tax the Ultra Rich." New York Times

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Republicans Against the Constitution and the US Postal Service

The US Post Office is heavily unionized. That’s why Republicans hate the postal service and its employees. In 2002, it was discovered that the Postal Service was wildly overpaying its retirement obligations to the tune of $71 billion. Not surprisingly, it soon began advocating for ways to use some of that excess. One bill passed that did almost nothing to solve the problem. Later bills that would have fixed the problem, however, all ran into the same stumbling block: they would have ostensibly added to the deficit. And the Bush administration was adamant that it would veto any bill that wasn’t deficit-neutral.

The US Postal service receives no government funding, but it has a large labor union, and it is a constitutionally mandated government agency, so in an attempt to kill the postal service, Republicans devised a new mandate in 2006 — for the prepayment of health benefits for future retirees, with the Postal Service being forced to pay between $5.5 billion and $5.8 billion annually. The money simply goes into an escrow account, where it is invested in special issue Treasury securities. Thus does it somehow magically help with the deficit. Also, of course, no sooner did the bill become law than first class mail began to fall off the cliff. The prefunding requirement became a noose around the Postal Service’s neck.

Incapable of simply letting the Postal Service go free — imagine what that would do to the deficit! — Congress continues to micromanage it, offering various ways for it to cut costs and raise revenue. The Postal Service, for instance, wants to cut Saturday delivery to save money; a Senate bill passed in April defers that decision for two years. But at least the Senate bill offers some relief from the absurd prefunding of health benefits. It would also return some of the excess retirement funding.

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