Warren Buffett, chairman and CEO of Berkshire Hathaway Inc., has long advocated for policies that support working-class families, insisting that the economic divide is not the result of the rich exploiting the poor.
Buffett, whose net worth is estimated at $137 billion, discussed income inequality in a 2015 Wall Street Journal op-ed.
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He stated: “There is no conspiracy behind this depressing fact: the poor are certainly not poor because the rich are rich.” Buffett emphasized that wealthy individuals such as Henry Ford, Steve Jobs and Sam Walton have contributed significantly to the well-being of society through their innovations and management expertise. Instead, he attributed the growing wealth gap to the “inevitable consequence of an advanced market-based economy.”
Buffett said improving education won’t work fast enough or go far enough to address income inequality. He also believes that the fight to raise the minimum wage, a popular proposal among many on the left, will not bridge the gap and could backfire by hurting jobs. “The better answer,” he said, is an expansion of the Earned Income Tax Credit (EITC), which provides credit starting on the first dollar earned, increasing to a ceiling before phasing out.
Since his op-ed, Buffett has consistently supported the EITC as a crucial policy to help low-income families. In a 2019 interview, he emphasized the EITC’s role in helping individuals who, despite hard work, remain disadvantaged by the economic system.
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The adjustments to the EITC in 2024, which increase the maximum credit to $7,830 for families with three children, reflect incremental improvements but fall short of Buffett’s comprehensive vision for the program. Additionally, the Child Tax Credit (CTC) has received bipartisan support. New proposals aim to lift around 400,000 children out of poverty in the first year and improve the conditions of millions more.
Buffett’s plea emphasizes the importance of government intervention in addressing economic disparities. Some agree that the EITC is a crucial tool, but others argue for a more aggressive approach, such as raising the minimum wage or taxing the wealthy.
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This article Warren Buffett Says It’s a Fact: ‘The Poor Are Definitely Not Poor Because the Rich Are Rich’ – But Suggests a Solution Originally appeared on Benzinga.com
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