Billionaire investor Warren Buffett today urged US lawmakers to raise taxes on wealthier Americans to cut Washington's huge budget deficit, saying the move would not dampen investments or jobs.
In a New York Times opinion article, the chief executive of Berkshire Hathaway proposed a tax increase on Americans who make at least $1m a year and an additional increase on those making $10m or more.
'Our leaders have asked for 'shared sacrifice.' But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched,' Buffett wrote.
'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 added.
The man known as the 'Oracle of Omaha' said his federal tax rate was 17.4% last year, while some investment managers were taxed just 15% on income reaching into the billions.
He noted that the middle class is taxed up to 25% in its income bracket, along with 'heavy' payroll taxes. In contrast, Buffett recalled 'far higher' taxes rates for the rich in the 1980s and 1990s, and yet nearly 40 million jobs were added from 1980 to 2000.
'You know what's happened since then: lower tax rates and far lower job creation,' he said. 'People invest to make money, and potential taxes have never scared them off,' he added.
Americans are losing faith with Congress's ability to tackle the country's financial woes, Buffett warned, calling for 'immediate, real and very substantial' action.
A protracted partisan battle between lawmakers culminated in a last-minute deal on August 2 to raise the $14.3 trillion US debt ceiling and narrowly avoid a US default.
'My friends and I have been coddled long enough by a billionaire-friendly Congress,' he said. 'It's time for our government to get serious about shared sacrifice.'
US economy faces 30% chance of second dip
The chances of the US economy slipping into another recession have risen significantly and now stand at 30%, USA Today reported last night.
Citing its quarterly survey of 39 top economists, the newspaper said the chance of another downturn was now twice as high as three months ago. That means another shock to the fragile economy - such as more stock market declines or a worsening of the European debt crisis - could push the nation over the edge, the report said.
Even if the US avoids a recession, the economists see economic growth at a sluggish 2.5% next year, down from 3.1% in April's survey, the paper noted.
The economy must grow above 3% to significantly cut unemployment, USA Today said. As a result, the economists predict the jobless rate will fall slowly, dipping only to 8.8% in the next 12 months, the report said. In April, they estimated unemployment would be 8.2% by mid-2012, the paper pointed out.
'We'll continue on a path of pretty slow and disappointing growth, but probably there's not a decline into recession,' USA Today quoted Robert Mellman, senior economist for JPMorgan Chase, as saying.
