From the Financial Times. Are the foundations for an effective restructuring of the tax system being laid? This is in reference to the low tax US, but it’s good to see commentary (in a right-leaning publication) calling for a wealth tax. It would be more effective than income tax for the investing community.
Mr Buffett’s taxable income of $40m is impressively small for a man with a reported $50bn fortune. He pays next to no tax because he accumulates wealth as unrealised capital gains, which escape tax altogether. In his case, shared sacrifice probably requires a wealth tax. Set at a modest 2 per cent, he would owe about $1bn a year, or 25 times his current taxable income.
The US should do as Mr Buffett asks, and tax him till he notices. He promises it will not change his investment policies, and he will know how the rest of us feel.
The full opinion piece does acknowledge Warren Buffett’s welcome calls for higher taxation. This is the exact kind of response we need. In essence: yes, but it will take more than fiddling with the marginal rates on a small part of the problem.
Past reporting on such ideas – e.g. Vince Cable’s initial floating of the mansion tax proposal – has been neutral at best. More typically, it has resorted to it’s-the-politics-of-envy flavour of commentary. So it’s good to see it being proposed so clearly and positively. Hopefully the return of the Lib Dem mansion tax will find fertile ground.