Mr. Warren Buffett wrote a column for the New York Times today in which he argues that he and others in his situation should pay more taxes. There are several problems with his argument:
1. He argues that he and others don't have to pay FICA "taxes". Yes, there is an income cap on FICA contributions, however, FICA was not called a "tax" until recently. FICA is the amount that you pay for your own social security retirement. At one time, it went into a trust fund or a "lock box" as Al Gore called it, payable only for social security benefits. There was a cap, because the wealthy were thought to have enough money when they retired so they would not need to contribute additional money to Social Security for their own retirement. Social Security was never meant to be a welfare program. Furthermore, companies, including those owned or invested in by Mr. Buffett match each employee's FICA contribution, yet, unlike the employee, they do not get benefits in the future for that contribution. So what happened to the trust fund or lock box? Congress has long since spent it and replaced the funds with IOUs to future generations. Its the spending that is the problem.
2. If the government confiscated ALL of the taxable income of the top 1% of wealthy Americans, it would not even cover the DEFICIT for one year, never mind the national debt. Its the spending that is the problem.
3. Mr. Buffett's funds would be better spent in creating jobs in the private sector. Jobs in the private sector mean more people paying taxes. More people paying taxes mean more revenue to the government. More taxpayers are created when the economy is growing. When this has happened in the past, the government did not use the extra revenue to pay down the debt. They spent the money. More revenue has always meant more spending, it has never been used to pay down our debt. Its the spending that is the problem.
4. There is nothing in the world stopping Mr. Buffet or President Obama, or others from contributing to paying down the national debt. In fact there is even a website for this. https://www.pay.gov/paygov/forms/formInstance.html?agencyFormId=23779454
Personally, I think it is more effective to invest in the private sector to create jobs, rather than sending it to the bottomless pit of government inefficiency.
It is the spending that is the problem.
5. When the government receives more revenue, its only reaction to date is to spend it. That is why people in the Tea Party and others have called for a balanced budget amendment. Mr. Obama says we shouldn't need an amendment to do our jobs - that is true, however, history has shown that the government has never used more revenue to pay down debt. Until the spending is controlled whether by a balanced budget amendment or otherwise, an increase in revenue is only going to be spent.