Warren Buffet is a billionaire businessman who once asked California Republican Governor Arnold Schwarzenegger to raise taxes on the rich. The wealthy governor ignored him. This week the Berkshire Hathaway CEO inserted himself into the contentious debate over the Bush tax cuts. In an interview with ABC’s Christiane Amanpour scheduled to air this weekend, he described what he thought were two clear facts that should be conceded. He said Americans at the high-end of the tax bracket have never had it so good and that the tax cuts as economic public policy have not benefited the country.
“The rich are always going to say that, you know, just give us more money and we’ll go out and spend more and then it will all trickle down to the rest of you. But that has not worked the last ten years, and I hope the American public is catching on.”
Time is running out for the Bush tax cuts, which were sold as temporary when they first passed in 2001 and 2003 and which, as Buffet suggested, haven’t proved their worth.
Buffet agreed with Congressional Democrats and the President that, as economic stimulus in the recession, it would be best to retain tax cuts on the lower-to-upper middle class but that the most wealthy Americans could weather the recession and help cut the deficit by paying tax rates established in the Clinton era, which were still among the lowest tax rates on the wealthy in modern history.
“If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further,” Buffett said. “But I think that people at the high end — people like myself — should be paying a lot more in taxes. We have it better than we’ve ever had it.”
Although polls have consistently suggested the American public sides with Democrats on the debate over whether or not to extend tax cuts for the rich, Republican lawmakers have taken a hard line on the matter. They have worked to make sure Bush tax cuts for all brackets of Americans remain tied together so they don’t have to solely defend tax cuts for the wealthy. Indeed some analysts have suggested Republicans are unmotivated to actually work on the problem, hoping the tax cuts for everyone all lapse and Americans feel the pinch and blame the president.
But Republicans may be playing this game too cleverly. Democrats are now reportedly intent to link the debate over the Bush tax cuts to the debate over an unemployment insurance extension. Arguing for an unpopular tax cut for the wealthy that adds trillions to the deficit while voting against unemployment insurance by citing the deficit and touting fiscal responsibility will be a hard case to make as the jobless recovery continues and destroys holiday retail business.
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