Obama Touts Buffet on Taxes

Did you catch what Sen. Barack Obama said in tonight's Democratic Presidential Debate?
If my friend and Hillary's friend Warren Buffet makes $46 million last year and he is paying a lower rate on, a lower tax rate than his secretary, there is something fundamentally unjust about that. I think. He acknowledges it. By the way, he has offered $1 million to any CEO of a Fortune 500 company who can prove that they pay a higher tax rate than their secretary. Nobody has taken him up on the offer.
I missed Buffet's challenge when he made it, so I had to look this one up for myself. Here is what he said in June of last year:
Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion, said: “The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 percent of humanity, you owe it to the rest of humanity to think about the other 99 percent.

Mr Buffett, who runs the investment group Berkshire Hathaway and is widely regarded as the world’s most successful investor, said that he was a Democrat because Republicans are more likely to think: “I’m making $80 million a year – God must have intended me to have a lower tax rate.”

Mr Buffett said that a Republican proposal to eliminate elements of inheritance tax, which raises about $30 billion a year from the assets of about 12,000 rich families, would broaden the disparity between rich and poor. He added that the Republicans would seek to recover lost revenue by increasing taxes for the less prosperous.

He said: “You could take that $30 billion and give $1,000 to 30 million poor families. Or should you favour the 12,000 estates and make 30 million families pay an extra $1,000?”
Mr Buffet extended his argument in November in testimony to the Senate Finance Committee.
"A meaningful estate tax is needed to prevent our democracy from becoming a dynastic plutocracy."

Buffett says he will bet any Forbes 400 member $1 million (proceeds to charity) that the average federal tax rate (income and payroll) paid by The Forbes 400 member is less than the average rate of their secretaries and receptionists. "So far only three close friends, all 400 members, have made the calculation for me," he tells Forbes in an e-mail exchange. "They all came up with results similar to mine but have no interest in being identified."
(Curious to find out how some Forbes 400 members responded to Buffet's challenge? Click the link.)

As a member of the other 99 percent, I appreciate Mr Buffet's remarks. I believe that tax reform is critical to preserving our democracy, as well as our prosperity as a nation. (You may recall that I've written on this subject before.) I'm encouraged to know that one of the world's richest men gets this.

Paul Krugman wrote last August that, "Mr. Edwards has offered a detailed, sensible plan for tax reform, and some serious antipoverty initiatives," and that led to my eventual support of John Edwards. In fact, I support Edwards now more than ever, despite the fact that he is up against an insurmountable financial hurdle and a corporate media that won't give him the time of day.

I'm just glad to know that Sen. Obama appreciates the need for tax reform, too.