Billionaire investor and philanthropist Warren Buffet, in an interview with CNBC, offered his solution to the U.S. debt crisis ~ one which might induce cardiac arrest among most wealthy individuals (especially those on Wall Street and on Capitol Hill) ~
"I could end the deficit in 5 minutes. You just pass a law that says that anytime there is a deficit of more than 3 percent of GDP, all sitting members of Congress are ineligible for re-election."
Buffet advocates that every person who agrees with his proposal pass it along to 10 or 20 others. He envisions a national groundswell for reform within days ~
"The 26th Amendment (granting the right to vote to 18-year-olds) took only 3 months and 8 days to be ratified. Why? Simple! The people demanded it. That was in 1971 ~ before computers, e-mail, cell phones, etc. Of the 27 Amendments to the Constitution, seven took 1 year or less to become the law of the land ~ all because of public pressure."
Buffet supports passage of a Congressional Reform Act, which states in part ~
- No tenure / no pension. A member of Congress collects a salary while in office, and receives no pay when they are out of office.
- Congress (past, present and future) participates in Social Security. All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security System, and Congress participates with the American people. The system may not be used for any other purpose.
- Congress can purchase their own retirement plan, just as all Americans do.
- Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3 percent.
- Congress loses their current health care system and participates in the same health care system as the American people.
- Congress must equally abide by all laws they impose on the American people.
- All contracts with past and present members of Congress are void effective 12-1-12. The American people did not make these contracts with members of Congress. Congress made all of these contracts for themselves. Serving in Congress is an honor, not a career. The founding fathers envisioned citizen legislators, so ours should serve their term(s),then go home and back to work.
While the reform act provisions alone do not provide the specific remedies to immediately address the U.S. budget deficit and the looming fiscal cliff, over the long term they would supply an incentive for lawmakers to genuinely seek solutions and compromise. This would require the presence of ideological moderates in both parties, to temper the intransigence of more radical elements.
One things is for certain ~ the days of exceptionalism enjoyed by the super-wealthy cannot be allowed to persist. We have a graduated tax scale for a reason. Those who are poor cannot afford to pay the same tax rate as those who are rich. Historically, whenever the wealthy have paid a significantly higher rate, the nation's economy has prospered. But whenever the wealthy have pressured, persuaded, or bribed politicians to establish lower tax rates for the wealthy, the nation's economy has suffered. (see graph above, click to enlarge)
All the Republican smoke-and-mirrors about the wealthy being the "job creators" is baloney. Most have one guiding principle ~ to maximize profit. In recent years that has actually meant outsourcing jobs to other nations, contributing to unemployment and economic stagnation, while widening the gap between the most wealthy 2% of Americans and everyone else. Add to that their access to well-paid accountants with intimate knowledge of tax loopholes and the tax shelters provided by offshore accounts, and many of the wealthiest end up paying little or no tax whatsoever. Recent Republican presidential hopeful Mitt Romney is a case in point.
I hope that President Obama and the Democrats in Congress stand firm on increasing the tax burden on those earning over $250,000 per year. Fair is fair. Even the increases being put forth do not come close to the tax rates which the wealthy have paid in years past, as the graph below affirms. Starting with the Reagan presidency, and cemented by the Bush I and Bush II presidencies, wealthy individuals and corporations have become the true welfare queens in our nation. It is long past time to remedy that disparity. Rather than the current 17 percent, let's see a return to a tax rate of 70-90 percent for the top tax bracket, with no loopholes or exemptions. Tax evasion through offshore accounts should be a separate felony under the tax code, with large fines and prison time. It is hardly evidence of the patriotism which wealthy conservatives claim as they wrap themselves in the American flag.