Warren Buffett on the best way to balance income inequality
Added: (Tue Apr 23 2019)
Pressbox (Press Release) -
Warren Buffett, investor and owner of Berkshire Hathaway has said in a recent interview that the most prudent approach to end income inequality is through offering Earned Income Tax Credit on top of salaries. “I think the Earned Income Tax Credit is the best way to put money in the pockets of people that don't fit well under the market system, but that are perfectly decent citizens, I also think that you want them to have a feeling of accomplishment.” Buffett the world’s third richest man said.
The Earned Income Tax Credit is a new and sustainable refundable tax credit that goes to hundreds of thousands of low to mid income workers. In particular parents, and single parents to supplement their earnings. The main reason that Buffett favors the EITC is that it rewards people for hard work. Buffett believes that issuing people with EITC will be a lot more effective than simply increasing the minimum wage. He continued to say “They just need more cash. They don't need a higher wage; they need more cash in their pocket. And the government, at relatively low cost, can provide a decent living for anybody that's ... that's working 40 hours a week, and has a couple of children. And we've gone in that direction, and it's sort of bipartisan,”
Additionally Buffett has said that he believes the EITC would more useful as a monthly payment rather than a yearly one, the bottom line Buffett was getting at, was that raising the EITC would effectively make the average person feel more part of the economic system as a whole. "I think there are various things you could do, but you want them to feel part of the system, and as more and more of these golden eggs are laid,” he said, “you want them to get a little more of their share."
According to the analysis of Census data from the budget and Policy Priorities center in the year of 2017 it was reported that more than 29 million United States Citizens received the EITC. That increased ‘extra’ tax credit lifted the incomes of nearly nine million American households above the poverty line. If there is one thing we know, it is that Buffett has a wealth of knowledge when it comes to the economy.
Martin Green – Midway Management