The rich respond to Obama’s “Buffett Rule”

September 21, 2011

Once the debt ceiling rancor faded, financial gurus and observers had little reason to think debate on taxing the wealthy would ignite again before Nov. 23. That’s when the 12-member congressional super committee issues its recommendations on finding at least $1.2 trillion in deficit reduction.

Then came President Obama’s announcement on Monday of the “Buffett Rule,” a plan to raise taxes on American households making more than $1 million annually. Suddenly, the millionaires who support such a plan — like Warren Buffett himself — had cause for hope after many months of anti-tax furor and tax hike inaction.

“It’s an excellent policy proposal,” says Wealth for the Common Good co-founder Chuck Collins. “The defenders of wealth and power are going to crazy over this proposal, but our job is to help balance the story. We’re already putting out calls; our members will call their legislators; they’ll organize their peers; they’ll write letters to editors.”

Yet it was also as though the Buffett Rule came with an unspoken corollary: Where proposals to tax the rich come, rhetoric and strong words on both sides of the issue will surely follow.

“The President’s speech today drew a clear line in the sand between patriotic Americans and people who just use the United States as a place to park their planes on the way to St. Bart’s,” says Agenda Project founder Erica Payne, who has worked closely with Wealth for the Common Good. “This issue is not complicated. It is not nuanced. If you care about your country, you pay taxes. If your country is in trouble, you pay more taxes.”

Under the President’s proposal — spelled out in a 67-page report issued by the Office of Management and Budget — the Buffett Rule (named for billionaire Warren Buffett) would mean that “No household making over $1 million annually should pay a smaller share of its income in taxes than middle-class families pay. As Warren Buffett has pointed out, his effective tax rate is lower than his secretary’s. No household making over $1 million annually should pay a smaller share of its income in taxes than middle-class families pay. This rule will be achieved as part of an overall reform that increases the progressivity of the tax code.”

Indeed, the 2,500 folks of high net worth who make up Patriotic Millionaires for Fiscal Strength would definitely agree — though not all of them find the President’s latest proposal exciting, let alone revolutionary, even though it’s sure to meet stiff opposition from anti-tax Republican lawmakers.

“The President’s proposal is way too modest,” says Charlie Fink, an entrepreneur, producer, activist and board member of the Agenda Project. “But it’s a start, anyway.”

Fink takes issue with those who claim that higher taxes on those in his wealth bracket would inhibit economic growth. “I have built and run businesses large and small over the past several decades, through booms and busts,” he says. “Only one thing creates jobs: demand for your products or services. Taxes were never, ever, a factor in my decisions about hiring.”


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These people sound sincere and I applaud them for their courage. They are INDEED putting country before self. Congratulations! So refreshing.

Posted by neahkahnie | Report as abusive

This whole thing sickens me. Really you want to pay more taxes? Then the IRS has a phone line that you can call to place your donation. How much money are you spending on the “organization” effort to get those unpatriotic ones to pay “their fair share”. More loopholes and more complexity in the tax code favors the rich not the poor or middle class. If these “patriotic” bazillionaires really want to do something, they can work to get the tax code on 10 pages of 8 1/2″ x 11″ paper. Maybe a national sales tax or a flat income tax. But as long as the tax code is the way it is there will be no fairness.

Posted by Byanyothername | Report as abusive


!!! Incredulous at your Michele Bachmann impression !!!

If the system itself is not rebalanced, and if the Buffetts of this world were to merely “donate” their wealth to a profligate government; the altruistic benefactors will only donate their own power and influence into oblivion and join the ranks of the lowly Americans who are increasingly slaves under the yoke of the rapacious and exploitative (a new aristocracy, getting more and more money generation after generation by the mere “virtue” of already having had it). Now that situation wouldn’t be good for anyone (rich, poor or benefactor.) 732

If the next century is to be another century of American growth, then it has to be another century of hard work. One cannot afford another decade of resting on one’s laurels. This century of hard work and self-improvement can only be brought about if the rich are made to pay enough of a “fair share” so that they must do something for the benefit of others (i.e., not just build a bigger mansion behind a bigger iron fence); and if the poor make enough money from their hard work as to justify their modest hopes and ambitions and motivate harder, smarter work.

Of course, all of this is totally pointless unless you Americans get your spending system in order: ok/2011/09/08/why-federal-construction-s pending-doesn%E2%80%99t-translate-to-gdp -growth/

There’s not much point increasing taxes unless those taxes are spent on something useful (and don’t just line the back-pockets of government contractors who send inflated bills to their pals in politics). Besides rebalancing the distribution of tax revenues, the distribution of expenditures also has to create real benefits fairly for all Americans.

Posted by matthewslyman | Report as abusive

Perhaps, with the help of a few thousand patriotic millionaires, the nihilists in the Tea Potty will open their eyes and realize they’re fighting the wrong fight.

Posted by loveone | Report as abusive

Mr. Buffett is a nice old man who, at the end of his life, does not want to be remembered for the facts of his life but the gentle fantasy that seems to have settled in on him. His remarks on taxation and the rich seem to reflect middle class values but he is not middle class. They more rightly show a man deflecting attention away from the problem children in our economy – corporations – who truly do not pay their fair share and do not even, these days, pay out reasonable dividends against their income as they should. Mr. Buffett’s diversion is very complex and it is serving Mr. Obama well to use it to cover some very simple and ugly truths.

Posted by Bagwa | Report as abusive

Taxing the rich at higher rate is hypothetical. This was precisely the way, income tax was introduced in the first place. This might only help Obama in his attemp for second term.

While there may be 10% patriotic rich men, who would willingly accept, the rest would only find ways to suppress the visible income. That is not only ditrimental to the growth, but the cultural fabric that has strengthened America.

Posted by SudhindraHegde | Report as abusive

It’s a common sense that the wealthy will benefit more if the U.S. gets out of the debt trap and the economy grows healthily again. Mr. Buffett has the foresight and wisdom.
Most corporate captains don’t have foresight and wisdom. They are looking for bonuses; they are bandits; they are just salesmen, not builders. That is why the U.S. economy is the sorry shape.

Posted by jlpeng | Report as abusive

The wealthy have the right to choose the charities that they wish to give to but it becomes more political than not. Those who became wealthy through own sweat and work deserve to reap the rewards of their smart moves in life.This is not the robin hood mentalaty country.

To just tax the rich to try and spread the wealth will no work as the money must first pass through the hands of washington politicians and their hands are known to be sticky at best.

The real problem is the old politicians who have been in washington too long and are linked to the favorite few who decide where to put the tax money. Once the peoples money becomes collected into the washington banks it’s called government money. Its like when you go to a Casino and they exchange your green for chips that does’t feel like money anymore and so politicians gamble with what they think is Casino money ( Government money) It’s
easier to waste it, after all its not theirs so it has little meaning and theres more where that came from is their thinking.
If we are to save America we must get rid of the politicians who corrupt it!!! November 2012 is the time lets think ahead. As long as we are still able to vote in private we can say who we will vote for to please someone but change our minds once in the booth!!! Don’t be afraid to vote for the best person for the Job, you will do it in private!!!Last of all God Bless America as he did in the beginning of this great country!!!

Posted by Jancouyea | Report as abusive

USA needs to go restore the federal personal income tax rates that the nation had during the Great Depression, but with some adjustments which realize today’s capitalist economy. A 95% federal personal income tax rate on net income over $1 million would be appropriate and fair. The only jobs today’s millionaires have created are in China, Vietnam, and South East Asia. So, let’s drop the myth that today’s millionaires are “job creators” for the USA. They get their Bush2 tax cuts and use the money to create jobs overseas. When the feds do what FDR did during the Great Depression, and pass a 95% tax rate on millionaires, then they can use the revenues to create jobs for millions of unemployed and help pull capitalism out of its death-spiral.

Posted by Trident4ever | Report as abusive

This is all political grandstanding. If they wanted to be taxed appropriately they could just file their earnings under 1040A.

Posted by billt568 | Report as abusive


First of all I don’t know and don’t care what Michele Bachmann says or does, or any of the Republican candidates for that matter. I was simply responding the points in the article. And after doing a little research it seems that Warren Buffet is being less than honest with us all. Seems like the money that he earns is Long Term Capital Gains, which is taxed at the 15% rate because to get the money to invest in the market for this, he was was already taxed somewhere between 25% – 35% depending on how he earned that money. He should really be comparing himself to a retired person who is starting to cash out their investments for income. His salary from Berkshire is a paltry $100k for which he pays the regular tax rate. Because so many retirees derive income from LTCG’s you are on a slippery slop taxing it, because they have worked their whole lives and been taxed on the income that they earned to invest. So maybe we make an exception that if you earn over … you get the point. This is why the tax code is a nightmare. And why I said what I said not because I was parroting some politician.

Posted by Byanyothername | Report as abusive

Quite the spin on this article, painting SO MANY rich people supporting this new idea. It’s lip service. Like billt568 and Byanyothername have suggested, if they really supported this, they would already be voluntarily paying more.
But only a true social leach would ask for 95%. That guy’s on welfare.

Posted by ajCallao | Report as abusive

If you are an American patriot, pay your fair share of taxes. Love it or leave you greedy %#@&*!s.

Posted by rhess595 | Report as abusive

This organization is pure stupidity – how can these “rich people” be so dumb ?? As other posters note, if you want to pay more taxes it’s very easy – you just write an extra check & mail it in as a donation to help pay down the debt.
These people can pay as much as they want that way, so why do they have an organization to try & get a law passed to make them pay extra ???

Posted by Bobo_9 | Report as abusive


My mistake, it was just that your suggestion (for the billionaire philanthropists to simply use the IRS voluntary donation mechanism) was 100% identical to the glib suggestion Michele Bachmann made in response to the same question… A suggestion which makes no rational sense when you look at the points I made in my first post, but which probably still sounds right to most American libertarian voters.

You acknowledge that U.S. capital gains tax is far below U.S. income-tax levels. How many poor people do you know who are making money merely by sitting on a pile of assets? Or speculating on assets for capital gains? This very fact (which you admit), means two things:
1. The U.S. tax system is not at all progressive (quite the opposite, as Buffett points out and which you clearly admit);
2. The U.S. tax system is rigged so as to encourage unbridled property speculation, since capital gains are more “tax-efficient” than virtually any other form of income going, encouraging disproportionate capital inflows into property finance (as a matter of historical fact, Reagan’s CGT reforms, as well as his financial industry deregulation, helped create the savings and loans crisis first, and since those reforms were not reversed when they should have been, have now created the subprime loans crisis as well. Been there, done that, and here we are again. Time to change something for real… Time for Obama to stop letting the Tea Party hold America hostage.)

Nobody is suggesting here that withdrawals from pension funds or bank accounts should be taxed by proportion on the amount withdrawn (as you point out, that income has already been earned and taxed). But if my assets appreciate above inflation bringing me an unearned windfall through no hard work on my part, then why shouldn’t that be taxed at the same rate as income from hard work in regular employment (or higher)?

I have heard though that the American tax code is something of a nightmare. If only everyone was taxed at the same rate for every different kind of income… Imagine the increase in productivity from people being able to simplify their accounting? Credit where credit is due – this “Buffett Rule” is an excellent reform.

Posted by matthewslyman | Report as abusive

Higher taxes will not affect business output. Business expenses are removed from taxable income anyway! This might actually motivate some people to spend more on their business because they won’t be able to pocket as much of the profits. The less appealing hoarding cash is for business owners, the better it will be for the working public.

Posted by JM1987 | Report as abusive

“This issue is not complicated. It is not nuanced. If you care about your country, you pay taxes. If your country is in trouble, you pay more taxes.” This is a ludicrous, simplistic statement. The reason the country is in trouble is that spending is out of control. The government and its leaders are like an addict that can’t say no and can’t get themselves under control. Paying more taxes is like being an enabler. It is time for an intervention by people who actually understand economics. Stop the spending. Stop increasing taxes. Get the out of control spending addiction under control.

Posted by TJR1960 | Report as abusive

Taxes are at their lowest levels in history!

Obama signed more tax cuts that have had Democrats and Republicans scratching their heads…like the Estate Tax which now exempts $5,000,000 from taxation when passed to heirs and lowered the top rate to 35%. Under Bush it was $2,000,000 and 45%.

WTF? Is Obama a double agent?

And with this, where are the jobs?

Buffet is right. Taxes need to return to a sane level and the +$1,000,000 club needs to go to the head of the line.

Posted by NobleKin | Report as abusive

If you want to create jobs for Americans, then scrap the piece of crap idea that giving corporations tax breaks will create jobs. How about: coporations that have out sourcing below a certain percent, or do not out source at all receive a tax break. THAT would create jobs in America. “You want your tax break? Create jobs for Americans.” That’s my piece. Have a great day folks.

Posted by Xadi | Report as abusive

The USA is the richest country in the World. Nevertheless, it has over 60 million plus people living in poverty; many cannot afford acceptable medical treatment. Evidently, billionaires pay proportionally less income tax than middle class citizens. Some suggest that socialism is tantamount to accepting the devil into your home. But look at socialist, egalitarian Sweden; it has very high taxes, an excellent social security system, good medical services available to all its citizens, and 36% of those employed work for the
government. We are more than satisfied with our lot! I suggest that wealthy US citizens look outwards and see how others live and pay taxes willingly.

Posted by IRATESCEPTIC | Report as abusive

Pay time ! Taxes AND spending cuts.

Posted by FBreughel1 | Report as abusive

After reading this article, I wonder if the dissacociation between tea partiers and appropriately taxing wealthy and business is explained by those that park their planes on the way to St. Bart’s. Is the tea party doing their bidding? We have representatives that are really representing the interests of foreign entities, be they individuals or corporations. Do these young congressmen know that they are the worlds puppets? Or are they merely ignorant of the fact? It makes you wonder what is really going on with congress and who really controls it.

Posted by SeaWa | Report as abusive

Paying down the national debt should be the first priority. This means raising taxes and cutting expenses. This is not complicated. Clearly one component to cutting expenses is for the Federal government to return to the bounds of the Constitution. Now we have a government with the “spending addiction” disorder.” They all need a 12 Step Program. I understand that the disorder is easy on them since they aren’t spending their own money.

Posted by alconnelly | Report as abusive

What is the IRS definition for middle class? The IRS pointas out in their own statistics that 47% of Americans pay no federal tax. Please tax me at the average rate of the middle class.

Posted by travelingmanjr | Report as abusive

It’s time for the “Net Worth Tax”. Income and payroll taxes attack the production of wealth, stifling growth and restricting the accumulation of wealth (“the rich get richer”), while the wealthy, such as Mr. Buffet, accumulate more.

Why not tax all wealth, instead of wealth production? It seems a very simple task to require each citizen to report an annual Net Worth statement to the IRS, detailing assets & liabilities (real-estate, stocks, bonds, mutual funds, collectibles, savings, etc. . . . including offshore bank accounts) and a simple flat tax be paid monthly to the IRS, eliminating the withholding of income, social security, and medicare payroll taxes.

This Net Worth Tax, would answer both political sides by truly “taxing the rich,” and unfettering societies’ wealth producers, creating growth like never seen before. Nay sayers will say it would be impossible to enforce accurate reporting. However, I don’t see where enforcement would be more difficult than current complicated system of reporting income and deductions. Failure to report accurately would result with similar punishments

Posted by commonsense10 | Report as abusive