Warren Buffett: Fair Federal Income Taxes

For the past five years, there has been controversy on how to reach economic equality by created fair federal income taxes. Warren Buffett, one of richest Americans, realized that he had paid a lower effective tax rate than his secretaries in 2010 (Buffett). Warren Buffett federal income tax was 17.4 percent of his income, while his secretaries paid over 30 percent of their income in federal income taxes (Buffett). The wealthiest Americans have found a loophole when paying their taxes, by paying their effective tax rate on their earned income, and paying only fifteen percent on their investments. Since a majority of these Americans wealth is through investments, they end up paying a lower effective tax rate than a middle-class citizen. Warren Buffett then proposed the Buffett Rule; a policy that would force Americans earning more than a million dollars through earned income and investments combined, would have to pay at least thirty percent of their income through federal income taxes. Instituting the Buffett Rule would force the top two percent of the economic period to pay a larger portion of the federal income tax. When thinking at the margin, the government should sanction this rule due to its positive future effects of decreasing the deficit and helping America get closer to economic equality (Lazzo). …show more content…
However, if the wealthy did decide not to invest their income, they would be buying more goods, increasing the money in circulation. In either situation, if the wealthy decided to save, invest, or spend their income, it would have a positive impact on the economy. Increasing the money in circulation would lead to businesses being more successful and the demand for products would go up, increasing the nation’s Gross Domestic

Show More

Related Documents: Warren Buffett: Fair Federal Income Taxes

Essay about Winner Takes All Politics Book Review