Tags: buffett | earned | income | credit | money | pockets

Buffett's 'Best Way to Put Money in People's Pockets'

By    |   Wednesday, 24 April 2019 04:02 PM

Berkshire Hathaway CEO Warren Buffett says the earned income tax credit is the best way of addressing income inequality because he thinks it’s “the best way to put money in people’s pockets.”

"[I] think the earned income tax credit (EITC) 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," Buffett told Yahoo Finance.

The earned income tax credit is a refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children. The amount of EITC benefit depends on a recipient's income and number of children.

The “Oracle of Omaha” says one of the reasons he favors the EITC is that it rewards work.

"I also think you want them to have a feeling of accomplishment," he said.

The EITC, he argues, is also more effective than raising the minimum wage.

"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," Buffett said.

Buffett also thinks that the EITC would be better as a monthly payment than an annual one.

"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."

Buffett is far from alone in the quest to resolve income inrequality.

JPMorgan Chase Chief Executive Officer Jamie Dimon, who leads one of Wall Street’s biggest banks, earlier this year said that the ultra-rich could afford to pay more taxes as a wider political debate rages over increasing taxes for the wealthy, Reuters reported.

“I believe that individuals earning the most can afford to pay more, and I have no problem paying higher taxes to address some of the fundamental challenges and inequities in our society,” Dimon said in a statement emailed by JPMorgan, in response to questions posed by reporters.

“However, we need to ensure that our tax dollars are going where they can be most effective - like expanding the earned income tax credit and other programs that support the people and communities who really need it,” Dimon added.

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Berkshire Hathaway CEO Warren Buffett says the earned income tax credit is the best way of addressing income inequality because he thinks it’s “the best way to put money in people’s pockets.”
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2019-02-24
Wednesday, 24 April 2019 04:02 PM
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