Warren Buffett: Stop Blaming The Rich For Income Inequality

| by Sean Kelly
Warren Buffett and President Barack Obama.Warren Buffett and President Barack Obama.

Warren Buffett, the third richest man in the world, said in a Wall Street Journal op-ed that the poor should stop blaming the rich for income inequality. 

In the opinion piece, Buffett targeted those who have sought to put the blame for income inequality in America on rich people. 

The poor are most definitely not poor because the rich are rich. Nor are the rich undeserving. Most of them have contributed brilliant innovations or managerial expertise to America’s well-being. We all live far better because of Henry Ford, Steve Jobs, Sam Walton and the like,” Buffett wrote. “Instead, this widening gap is an inevitable consequence of an advanced market-based economy.” 

Buffett dismissed claims made often that the income gap can be rectified through an increase in the minimum wage or by an improvement in the quality of education. Instead, he wrote, the way to solve the problem is by increasing the Earned Income Tax Credit, which is currently given to millions of low-income workers.

“The existing EITC needs much improvement. Fraud is a big problem; penalties for it should be stiffened,” he wrote.

“There should be widespread publicity that workers can receive free and convenient filing help. An annual payment is now the rule; monthly installments would make more sense, since they would discourage people from taking out loans while waiting for their refunds to come through. Dollar amounts should be increased, particularly for those earning the least.”

Buffett did acknowledge that the gap seemed to be widening, with the total net worth of those on the most recent Forbes 400 list being $2.3 trillion — compared to a $93 billion total in 1982 when the list was first compiled. In that same period, according to Buffett’s piece, median household income in the country rose only 180 percent.

Sources: MSN Money, The Independent, Wall Street Journal

Photo Credit: Pete Souza/Flickr