|Joslyn Art Museum|
Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.
I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.
Buffett goes on to recommend that tax rates be raised on taxable income in excess of $1 million and even more on $10 million plus. He himself is in that category.
This advice might raise the hackles of some folks in my hometown of Greenwich, CT; Hedge Fund Alley, where wildly out-of-whack incomes yield plenty of Lear Jets, personal helicopters and fourth and fifth homes but not many Public Art Museums.
Warren, you are my hero!