Credit worthiness of the United States; End the deficit in five minutes; 60% long-term capital gain and 40% short-term gain

I finally managed to find some time to catch up on things I want to read, “CNBC Transcript: Warren Buffett on Russian Roulette, Tax Breaks for Corporate Jets, and America’s Bright Future

Here are a few excerpts from CNBC Transcript: Warren Buffett.

BUFFETT: I can— I can— I can end the deficit in five minutes.
BECKY: How?
BUFFETT: You just pass a law that says that any time there’s a deficit of more than 3 percent of GDP, all sitting members of Congress are ineligible for re-election. Yeah. Yeah. Now you’ve got the incentives in the right place, right? So it’s capable of being done. And they’re trying to use the incentive now we’re going to blow your brains out, America, you know, in terms of your— of your— in terms of your debt worthiness over time, and that’s being used as a threat. A more effective threat would be just to say if you guys can’t get it done, we’ll get some other guys to get it down. And incidentally, we had— we had Simpson-Bowles, you know, almost eight or 10 months ago.
BECKY: Right. […]”

BUFFETT: Oh, I would— well, you certainly change it on capital gains and dividends. I mean, if you take the 400 richest Americans and the 400 people who paid the greatest income tax— the Treasury’s been putting those figures out for 15 years or so. If you go back 15 years, the average income of the 400 top people— the 400 top people’s around 45 million. They paid about 27 percent. Now it grew, the most recent figures, to 350 million. That is incredible. And that’s nothing like’s happened to the rest of the world. The tax then was 16.6. So while they’ve gotten ungodly richer, the rate has come down 11 points. Now, that is a big tilt in the world. And I would go after the very rich. […]”

BUFFETT: I would say this. I would say this. The capital gains rate at 15 percent, the— if you buy a future, S&P future in Chicago and it goes up 10 seconds later, you resell it, it’s 60 percent long-term capital gain and 40 percent short-term gain. Now, I’m not sure, you know, how anybody can come up with the logic of that.”

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