In a New York Times op-ed today, billionaire investor Warrenn Buffett renewed his oft-made call for tax increases on the ultra-wealthy. “While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks,” he wrote. “My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.”
Today, 2012 GOP presidential contender Mitt Romney — who has a personal net worth between $190 million and $250 million — rejected that argument. Reprising a version of his “corporations are people” argument from last week, Romney claims that Buffett’s taxes are higher than he says they are because he, as a business owner, bears the burden of the corporate income tax. (This argument comes from a piece by the Wall Street Journal’s Stephen Moore, who explicitly believes that the poor need to pay higher taxes to finance tax cuts for the rich.) Romney went on to claim that raising taxes on the wealthy would actually be a tax increase on small businesses:
Look, I know there are some who say “let’s just tax the rich.” Let’s raise the taxes on the rich…Businesses, small businesses. Are you a sub-S corporation or a c-corp? For those that aren’t familiar with that, that means that his business pays personal income tax. He’s taxes at the personal income tax rate.So if we raise taxes on wealthy people, that means businesses see their taxes go up. I don’t want to raise taxes on employers.
As we’ve noted over and over again, during both the 2008 and 2010 tax debates, raising taxes on the rich will have little effect on small businesses. Fewer than 2 percent of small businesses owners make more than $250,000, never mind the $1 million level, at which Buffett is advocating a tax increase. Far more small businesses (14 percent) claim the Earned Income Tax Credit, which is only available to low-income workers.
Just letting the Bush tax cuts expire for those making more than $1 million per year could reduce deficits by $500 to $600 billion over 10 years, according to the same Wall Street Journal that Romney ceaselessly cites.