The Enlightened Rich Want to Be Taxed
NYTimes.com – opinionpages/editorial
Published: September 9, 2011
Some of the world’s wealthiest people are calling for higher taxes on the rich. They seem to recognize that the burden of the economic downturn cannot be borne entirely by the poor and middle class.
After the American billionaire investor Warren Buffett urged Congress last month to raise taxes on millionaires, the call echoed across Europe. Sixteen of France’s wealthiest individuals urged the government to raise their taxes. The Italian Formula One magnate Luca di Montezemolo publicly backed Mr. Buffett’s idea “for reasons of fairness and solidarity.” About 50 of Germany’s richest people have been campaigning for a higher top tax rate since 2009.
The suggestion is motivated, no doubt, by a sense of justice — that the very rich, who have survived the financial crisis very well, should contribute more to shrinking public coffers to reduce the spending cuts that would hurt the most vulnerable.
But altruism does not fully explain why members of the global elite are suddenly keen to prevent the deep budget reductions that will occur if governments don’t raise more money. They are also moved by what some might call enlightened self-interest.
Their walls may be high, but the wealthy live in the same world as the poor and the middle class, who have been walloped by unemployment and cuts to social welfare programs. When Mercedes-Benzes burned in Berlin and riots broke out on London’s streets, the rich were watching on TV.
These nations risk more than social unrest. Austerity is already undermining economic growth on both sides of the Atlantic. Slashing funds for education, infrastructure and other vital needs will undercut future competitiveness and endanger industrialized nations’ economic performance for generations.
Americans have been historically less inclined than Europeans to explosions of social rage, despite suffering more poverty than most other wealthy democracies. But with unemployment above 9 percent, rising poverty rates and declining family incomes, the no-taxes, all-cuts agenda that has gripped Congressional Republicans will fray our social fabric and squander human capital here as well.
Mr. Buffett lives on the other end of the income spectrum, where 1 percent of American taxpayers — about 750,000 families — pocket more than 20 percent of the nation’s income. It is not surprising that the enlightened rich would think paying higher taxes was a wise investment. The Republicans in Congress need to be persuaded of that truth.
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