To Infinity and Beyond

Those are the immortal words of Buzz Lightyear. In reality, we may not be reaching for infinity yet, but something just a little bit closer - that mysterious red planet that has spawned so many science fiction and Armageddon movies. On Saturday, November 26th, the United States launched he $2.5 billion Curiosity Mars Rover, with the mission of searching for ancient habitable environments to learn if Mars was once home to microbial life.

On that same day, only two days after Thanksgiving and one month before Christmas, children living in 17 million US households went to bed hungry. While hunger and poverty are reaching record levels in the US and the Republican controlled Congress looks for new ways to cut social welfare programs in the name of reducing the federal deficit, our government was able to justify spending $2.5 billion to learn if there was ancient life on Mars. We all should be asking, “what about life on this planet?”

If we kept our focus on earthly needs and not on the remote possibility of Martian microbes, what could that $2.5 billion have provided? For starters $2.5 billion dollars could have produced more than 6,00 units of affordable housing, providing a decent place for thousands of American families currently without homes.

There are other possibilities for those dollars as well, the same amount of federal dollars could have been used to hire approximately 37,000 elementary school teachers. Replacing many teachers fired due to budget cuts, thereby reducing class size and providing a higher quality education for thousands of children. Or it could have been used to provide more than 150,000 college scholarships making college attainable to young people whose families cannot afford the increasing costs of a college education. If you are more concerned about safety, these funds could have been used to hire 40,000 police and firefighters, making u for the thousands who have been laid off due to municipal budget cuts.

In his remarks at the John F. Kennedy Space Center on April 15, 2010 President Obama stated “I am 100 percent committed to the mission of NASA and its future. Because broadening our capabilities in space will continue to serve our society in ways that we can scarcely imagine. Because exploration will once more inspire wonder in a new generation -- sparking passions and launching careers. And because, ultimately, if we fail to press forward in the pursuit of discovery, we are ceding our future and we are ceding that essential element of the American character.

Now, just nineteen months alter, in the midst of a severe economic downturn, when millions of children are having their dreams denied or deferred these words seem to run hollow. What do we gain by inspiring wonder in a new generation if they are unable to pursue that wonder through a quality education or if they are too hungry to aspire to anything more than wondering where their next meal will come form or when their Mommy or Daddy will get a job or they will have a permanent place to live. How do we tell them that as a country we believe that finding microbes on a distant planet is more important than helping them to succeed right here on planet Earth?

When we cannot even provide the basic needs for millions of American citizens, and unemployment is approaching record levels, we must make crucial decisions about how our federal tax revenues are spent. Do we focus our attention on improving life here on earth, or do we look out beyond the stars and focus on the possibility of ancient life existing on a distant planet?

The Shocking, Graphic Data That Shows Exactly What Motivates the Occupy Movement

By Les Leopold, AlterNet
Posted on October 23, 2011, Printed on October 24, 2011
http://www.alternet.org/story/152811/the_shocking%2C_graphic_data_that_shows_exactly_what_motivates_the_occupy_movement

What are the Occupy Wall Street protesters angry about? The same things we’re all angry about. The only difference is the protestors turned their anger into public action. Occupy Wall Street lit the embers and the sparks are flying. Whether it turns into a genuine populist prairie fire depends on all of us.  

Now is not the time for wonky policy solutions, as the media meatheads are calling for. Rather, it’s time to air our grievances as loudly as possible, which is precisely what Wall Street and its minions fear the most. Here’s a brief list of why we should be angry and the charts to back it up. 

1. The American Dream is imploding...  

The productivity/wage chart says it all. From 1947 until the mid-1970s real wages and productivity (economic output per worker hour) danced together. Both climbed year after year as did our real standard of living. If you’re old enough, you will remember seeing your parents doing just a bit better each year, year after year.  Then, our nation embarked on a grand economic experiment. Taxes were cut especially on the super-rich. Finance was deregulated and unions were crushed. Lo and behold, the two lines broke apart. Productivity continued to climb, but wages stalled and declined. So where did all that productivity money go? To the rich and to the super-rich, especially to those in finance.

2. Our wealth is gushing to the top 1 percent...

Actually the top tenth of one percent. Because of financial deregulation and tax cuts for the rich, the income gap is soaring. Here’s one of my favorite indicators that we compiled for The Looting of America. In 1970 the top 100 CEOs earned $45 for every $1 earned by the average worker. By 2006, the ratio climbed to an obscene 1,723 to one. (Not a misprint!)

3. Family income is declining while the top earners flourish...

As women entered the workforce, family income made up for some of the wage stagnation. But now even family incomes are in trouble. Meanwhile, the incomes of the richest families continue to rise. 

4. The super-rich are paying lower and lower tax rates...

To add financial insult to injury, the richest of the rich pay less and less each year as a percentage of their monstrous incomes. The top 400 taxpayers during the 1950s faced a 90 percent federal tax rate. By 1995 their effective tax rate – what they really paid after all deductions as a percent of all their income – fell to 30 percent. Now it’s barely 16 percent. 

5. Too much money in the hands of the few combined with financial deregulation crashed our economy...

When the rich become astronomically rich, they gamble with their excess money. And when Wall Street is deregulated, it creates financial casinos for the wealthy.  When those casinos inevitably crash, we pay to cover the losses. The 2008 financial crash caused eight million American workers to lose their jobs in a matter of mont

hs due to no fault of their own. The last time we had so much money in the hands of so few was 1929! 

6.  We’re turning into a billionaire bailout society...

We bailed out the big Wall Street banks and protected the billionaires from ruin. Now we are being asked to make good on the debts they caused, while the super-rich get even richer, some making more than $2 million an HOUR! It would take over 47 years for the average family to make as much as the top 10 hedge fund managers make in one hour. 

7. The super-rich still control politics...

Both political parties are occupied by Wall Street. For nearly an entire generation they have competed with each other to gain campaign contributions in exchange for tax breaks and regulatory loopholes for the richest of the rich. Today’s so-called financial reforms are porous, while the money continues to flow to both parties.
 
8. Unemployment is a catastrophe...

The reckless gambling on Wall Street tore a hole in the economy sending millions to the unemployment lines. Wall Street caused the enormous spike in unemployment and no one else – not the government, not home buyers, not China.

9. Our prospects for the future are growing dim...

It’s bad enough that unemployment is sky-high. But it’s even worse when you can’t find a job for months, even years. Right now the number of unemployed for 26 weeks or more is at record levels. Many of the long-term unemployed will never work again.

10. The big banks are getting even bigger...

Too big to fail is alive and well. Our nation’s biggest banks are growing larger and larger with no end in sight. Despite what politicians say, the taxpayer will bail out the big banks again. And the big banks know it.
Stand up and be counted!
Americans are a patient people. Mass movements do not form very often. Most of us hoped that after the crash, the big banks would be broken up, the casinos would be shut down and the gamblers would be punished. At the very least, we expected that the elite financiers would pay for the damage they created – the jobs destroyed, the neighborhoods wrecked, the services cut. It didn’t happen. Finally something clicked. A small number of kids stood up and got noticed. And now it’s growing. We see an outlet for our frustration, our justifiable anger, our disappointment in leaders who sold out.
We don’t know where it’s all going. But this is the time to stand up and be counted – literally. The currency of a populist revolt is numbers in the street. Let’s show our anger where it will be seen. And let us take heart from the words of Franklin Roosevelt who during his first inaugural address in 1933, led the first occupation of Wall Street: 

Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.
True, they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit, they have proposed only the lending of more money.
Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored conditions. They know only the rules of a generation of self-seekers.
They have no vision, and when there is no vision the people perish.
The money changers have fled their high seats in the temple of our civilization. We may now restore that temple to the ancient truths.
The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.
Happiness lies not in the mere possession of money, it lies in the joy of achievement, in the thrill of creative effort.
The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and to our fellow-men.
Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be values only by the standards of pride of place and personal profit, and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing.

Les Leopold is the executive director of the Labor Institute and Public Health Institute in New York, and author of The Looting of America: How Wall Street's Game of Fantasy Finance Destroyed Our Jobs, Pensions, and Prosperity—and What We Can Do About It (Chelsea Green, 2009).

© 2011 Independent Media Institute. All rights reserved.
View this story online at: http://www.alternet.org/story/152811/

Elizabeth Warren - Massachusetts Senate Candidate - On Class Warfare

Courtesy of Rumproast.com

I hear all this, you know, “Well, this is class warfare, this is whatever.”—No!

There is nobody in this country who got rich on his own. Nobody.

You built a factory out there—good for you! But I want to be clear.

You moved your goods to market on the roads the rest of us paid for.

You hired workers the rest of us paid to educate.

You were safe in your factory because of police forces and fire forces that the rest of us paid for.

You didn’t have to worry that maurauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.

Now look, you built a factory and it turned into something terrific, or a great idea—God bless. Keep a big hunk of it.

But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

Class Warfare Index

46.2 million          Number of people living in poverty in the United States

15.1                      Per cent of Americans living in poverty

6.7                        Per cent of Americans living in “deep poverty” less than 50% of the poverty level

0                           Number of times poverty was mentioned by either candidate in the 2008 Presidential Debates.

24                         Per cent of total US wealth held by top 1%

$46,495                Median US income in 2009

7.1%                     Decline in median US income since 1999

9.9                        Per cent of Caucasian Americans living in poverty

25                         Per cent of African Americans living in poverty

50 milion              Number of people in US without health insurance

33                         Per cent of Hispanic Americans without health insurance

11.1                      Per cent of Americans living in poverty in 1973, after the “War on Poverty”

15.2                      Per cent of Americans living in poverty, in 1983, three years into Reaganomics

$22,050                Federal poverty level for a family of four

$44,100                Income needed to provide basic needs for a family of four

15 million             Number of US children living in poverty

21                        Per cent of children living in US in poverty

36                        Per cent of all people living in poverty who are children

64                        Per cent of total national wealth controlled by top 5%

87                        Per cent of national wealth controlled by top 20%

13                        Per cent of national wealth controlled by bottom 80% of population

38                        Per cent of Bush tax cuts that went to top 1%

1                          Percent of Bush tax cuts received by bottom 20% of population

$520,000             Average Bush-era tax cut for top .01% of households

$2.6 trillion          Total increase in federal deficit attributed to first ten years of Bush tax cuts

$5 trillion             Cost of extending Bush tax cuts for next decade

$400 Billion         Total amount spent on interest to finance first ten years of Bush tax cuts

-7.4%                   Decrease in real family income for bottom 20% of families between 1979 and 2009

+72.2%                Increase in real family income enjoyed by the top 5% of families between 1979 and 2009

+116%                 Increase in real family income enjoyed by bottom 20% of families between 1947 and1979

+86%                   Increase in real family income enjoyed by top 5% of families between 1947-1979

1980                    Year Reaganomics and trickle down economics began impacting federal tax codes

236                      Number of Congressional Republicans branding Obama’s efforts to fairly tax the wealthiest Americans as “class warfare”

The No (or not so many) Jobs Jobs Bill

In his speech to the joint session of Congress on September 8, President Obama proposed the American Jobs Act,  designed to be his answer to the stalled economy and high unemployment.  The $447 billion bill relies heavily on tax cuts as a way of stimulating the economy by putting more money in the hands of consumers and encouraging employers to create jobs.  This, in spite of the fact that there is no empirical, historical evidence that tax cuts create jobs.  In reality if you follow the arc of tax cuts starting with Reaganomics and the small government fervor of the 1980’s, through the Bush-error tax cuts, in reality it would appear that tax cuts have a negative impact on the economy.

The costliest cut proposed is a fifty per cent reduction in the payroll tax.  By calling this a payroll tax cut,  the President is obfuscating the fact that in realty it is a Social Security payroll tax cut.  The President is proposing that the 6.2% Social Security payroll tax paid by employers and employees be halved to 3.1% costing an estimated $240 billion.  The idea behind this cut is to put more money into the economy so that small businesses can hire new workers and current workers will have more cash to spend, thereby stimulating the economy.  The average worker will realize a payroll tax reduction of approximately $1,500.  While this is not an insignificant amount to put into someone’s pocket, it will do little to change an individual’s economic circumstances.  First, $1,500 translates to less than $30 per week or $120 per month.  Most people with an extra $120 per month will use it towards offsetting the high gasoline costs, paying down their credit card bills or helping to pay their mortgage or rent.  Not one of these options contributes to creating one single new job.  Instead it will increase the demand for gasoline thereby helping to maintain high gas prices or go directly to the banks and help fund even larger bonuses for executives.

The bigger issue that the President does not address, and which has been entirely ignored by the media, is that this $240 billion cut will further strangle the Social Security trust fund.  This is a Democratic president hammering another nail into the coffin of Social Security.  Even the Republicans have criticized their leading presidential contender for suggesting that Social Security would need to be done away with.  How can the President justify reducing the income of Social Security by $240 billion while it is agreed by all analysts that the trust fund needs to be shored up to provide for the long-term viability of the program and ensuring benefits for today’s workers?  The system requires additional inputs of cash, not less.  In 1955 there were 8.6 workers paying into the system for each retiree receiving benefits, while in 2010 there were less than three.  As the baby boom generation marches toward retirement, this ratio will continue to decrease.  Additionally, as older workers are laid off and are unable to find new jobs, they will file for Social Security earlier creating more of a drain on the system.

According to the President’s proposal a quarter of a trillion dollars will be taken from the system at a time when we should be looking at ways to increase the money going into the Social security trust fund, not reducing it.  While this cut will have little or no impact on job creation, it will move the crisis of Social Security up a number of years resulting in cuts to benefits and raising the retirement age.  While the President seeks to solve one crisis, he is exacerbating another.

The president has also proposed tax credits to companies that hire certain unemployed individuals.  Companies hiring a person who has been unemployed for six months or more can qualify for a $4,000 tax credit and companies hiring an unemployed veteran  can qualify for a $9,600 tax credit.  Just like tax cuts, tax credits do not create jobs.  All these credits will do is determine who gets hired when a  job is available.  The tax credits will flow to companies that would be offering jobs anyway.  These will not necessarily be new jobs.  In order for a company to create a job, there needs to be work .  If the economy remains stagnant, and consumer demand remains low, then regardless of tax credits, new jobs will not be created.  So these tax credits will not result in any net increase in employment.  And the President does not address what happens to those jobs once the tax credit expires.  Is he just creating a vicious cycle of short-term employment? 

By referring to his American Jobs Act as a bi-partisan bill that includes both Republican and Democratic initiatives, the president has proposed a bill designed to win Republican support through its heavy reliance on tax cuts.  These tax cuts make up approximately 59% of the cost of the bill, with only 41% targeting government spending that will actually impact unemployment.  There is a simple fact of life, government spending on big projects, such as those proposed only modestly in this bill – modernizing up to 35,000 schools and infrastructure investments – and not tax cuts put people back to work.  Employed people spend money and pay taxes, and that is what impacts a recession.  The only institution large enough and broad enough to help the country spend its way out of this economic slump is the United States Government.

It does not take Nostradamus to predict the outcome of this legislative process.  The Republican controlled House will support portions of the bill, those that focus on tax cuts, while defeating the spending portions of the bill including saving the jobs of teachers, cops and firefighters, extending unemployment and providing low cost mortgage refinancing.  Furthermore, the Republicans in the House will defeat any attempt by the President to offset the cost of this bill through closing tax loopholes for big business and raising taxes on the wealthiest Americans.  Once again the Republicans will show that they are the shills of the truly wealthy and of corporate America, and once again the Democrats will show that they have no backbone as a party.  The goal of the Republicans is to stop the President from a second term in office, and nothing guarantees that more than a sagging economy. 

Don’t Tax Me But Give Me My Government Services

It seems as though everybody resents paying taxes but yet we all still want the government to provide services when we need or want them. Without taxes our roads would be impassable, bridges would be unsafe, emergency services would be almost nonexistent, there would be no public education, police or fire. In short, we would be living in Somalia, a country without a functioning government. While the United States continues its slide downhill toward a third world economy, the only institution large enough to prevent that from happening is the government. That is before the vast majority of Republicans in the House and Senate signed a no new tax pledge, binding them to oppose any and all efforts to increase the marginal income tax rate for individuals and business; and TWO, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.

The author of this pledge is Grover Norquist, the head of Americans for Tax Reform. While tax reform itself is not a bad thing, that is not what Grover Norquist or this pledge is about. In his own words, Norquist has very clearly laid out his agenda when he stated: My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub. It is not about tax fairness or even about tax reform, but it is about reducing government and returning to a strict unregulated, untaxed free market economy that will leave millions of Americans behind.

Republicans make a show of shrinking government, while decrying big government, but have no qualms about funneling its largesse to the wealthiest among us with lavish tax cuts. In fact, those that rail the loudest against big government and taxes are the greatest beneficiaries. One example is in the imbalance of federal taxes paid by the citizens of the states. Currently thirty states are represented by Republican governors. Twenty-two of these receive more in federal tax expenditures than they pay in. On the contrary only nine states represented by a Democratic governor receive more than they pay in federal taxes.

One of those states living off the fat of the federal government is Virginia, currently represented in Congress by Eric Cantor, the majority leader of the House. Not only is Cong. Cantor a signer of the no tax pledge but he has taken the anti-tax mania to newer and more absurd heights. In the wake of Hurricane Irene, Cantor has called for all new spending in federal disaster assistance to be offset by cuts elsewhere in the federal budget. This at the same time that FEMA is being starved by budget cuts forcing it to reduce assistance to tornado ravaged parts of Missouri, in order to provide disaster assistance to areas ravaged by Irene. (it is worth noting here that Missouri is represented by a Democratic Governor)

Back in Virginia however, Mr. Cantor and the entire Virginia Congressional delegation has signed a letter asking for federal emergency assistance. So Mr. Cantor, like so many of his Republican colleagues has no trouble trying to have it both ways. Fight new taxes, force cutbacks in services that he does not believe in, while enjoying a greater return on federal taxes paid by his state; and, at the same time requesting additional federal funds in the form of disaster relief. It seems that Cong. Cantor’s plan is to force shrinkage of the federal government in all states but his own. But he is not the only one, in addition to Virginia, Republican governors in New Jersey, Pennsylvania and Georgia are also seeking federal disaster assistance. Two of these states, Pennsylvania and Georgia, are on the list of states receiving more in federal funds than they pay. If these Republicans were true to their so-called ideals then they should use the excess funds that they receive from the federal government to pay for their disaster relief.

Eric Cantor Wants 'Matching Spending Cuts' on Hurricane Irene Victim Assistance Funds

However, if you are going to be hypocritical, then why not go all out and do it Texas size. Rick Perry, Governor of Texas and leading Republican presidential candidate, said this about taxes in an interview with James Robinson for Life TV: I think we are going through these difficult economic times for a purpose, to bring us back to the biblical principals of you know, you don’t spend all the money. You work hard for those six years and you put up that seventh year in the warehouse to take you through the hard times and not spending all of our money. Not asking Pharoah to give everything to everybody and to take care of folks because at the end of the day it’s slavery and we become slaves to government. Watch it here.

Perhaps Mr. Perry believes it is only appropriate for others to go back to those “biblical principles” but not for him. In his advocating for the federal government to provide federal disaster aid to his state to cope with the forest fires he stated: I think we have had 9,000 separate fires in the state of Texas. The federal government has only helped us with twenty-five of then, that’s inappropriate.

It would seem that what is really inappropriate here is that Governor Perry does not follow his own biblical interpretations. If Mr. Perry had saved in the seventh year to take his state through the hard times, as he preaches, then there would be no need to request federal disaster aid. It would appear that following his preaching on the bible and government is his way of telling others how to live. Another take on “do as I say, but not as I do.”

While I’m talking about Rick Perry and biblical interpretations I just can’t sign off without mentioning Michele Bachman and her evangelical preaching’s. Instead of seeing the recent natural disasters as one result of global climate change, Ms Bachman sees it as a message from above not to take better care of Mother Earth but as an economic message to the people of the United States when she says I don’t know how much God has to do get the attention of the politicians. We’ve had an earthquake, we’ve had a hurricane. He said “Are you listening to me here?” Curiously, she left out the runaway forest fires and the drought in Texas. It seems that God only gives messages when he disagrees with Democratic politicians.

From The Mouth of a Billionaire

I'm not one that you would usually find quoting Warren Buffet, but after reading his opinion piece in the August 15th edition of the New York Times, I find that anyone with his wealth and influence, that makes sense in these senseless times, deserves quoting. So for the benefit of readers who do not read or get the New York times I am quoting his piece in its entirety, it is definitely worth the time to read. Of course it is not perfect, he advocates for continuing the so-called "payroll tax cut," when in reality it is a reduction in the Social Security tax. Continuing this will only drive the nail further into the coffin of Social Security as it only serves to starve it of much needed revenues. This "payroll tax" cut was proposed by President Obama as a way of throwing a bone to the middle class while he caved in on tax cuts to the rich. But the naked truth is, tax cuts do not help in a recession they never have. Just look at the Bush error tax cuts that preceded the current recession.

In addition, Mr Buffet ignores other contributors to the current financial crisis, much as all the Republican presidential candidates do. In the rush to blame the current administration for the crisis, those high-minded Republicans on the campaign trail forget about George Bush's two unfunded wars and his unfunded Medicare prescription program. These two, along with his tax cuts for the rich, formed a perfect economic storm that has brought the country to the brink of default.

But with that in mind, Buffet's op-ed piece is a good read, one that our politicians should take note of and act upon if they are sincere about solving the nation's financial crisis.

Stop Coddling the Super-Rich

By WARREN E. BUFFETT

Omaha

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.

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. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.

To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.

Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.

The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)

I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.

Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.

Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

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.

excerpted from the New York Times, August 15, 2011

Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway