Buffett's Anti-Poverty Program (Reagan Supported It Too)
UPDATE: March, 2016 - Warren Buffett's annual letter to the shareholders of his holding company, Berkshire Hathaway, is viewed as one of the "must reads" by most people in the business and financial communities. This year's letter not only reiterates his preferred approach for reducing poverty, but also includes an interesting general take on those hard-working Americans whose skill set is not such that they can prosper in today's changing economy:
"The answer… is not the restraining or outlawing of actions that increase productivity. The solution, rather, is a variety of safety nets aimed at providing a decent life for those who are willing to work but find their specific talents judged of small value because of market forces. (I personally favor a reformed and expanded Earned Income Tax Credit that would try to make sure America works for those willing to work.)
The price of achieving ever-increasing prosperity for the great majority of Americans should not be penury for the unfortunate."
We agree with Mr. Buffett on both counts and hope you do, too. What follows is our original story on the Earned Income Tax Credit, which has been supported not only by Mr. Buffett, but also by President Reagan and most Congressional Democrats.
May, 2015 - We read a story the other day in which noted business tycoon Warren Buffett spoke about poverty in America and how best to combat it.
Buffett is not a fan of increasing the minimum wage - at least not to $15. But he is a fan of the Earned Income Tax Credit - as was Ronald Reagan and as we are too.
 (Image from businessweek.com)
The Earned Income Tax Credit (EITC) provides refundable tax relief for low/moderate income families who are employed and, therefore, have earned income. These are the folks who have to spend virtually every dime they earn on the necessities of life;
the EITC gives these working people the break they need to help them raise a family. It also serves as an incentive for families to move off of welfare and into the job market.
At one time both parties recognized these benefits and were strong proponents of the EITC. The credit was first signed into law by Gerald Ford after being passed by a Democratic Congress.
Ronald Reagan, who signed a Democratic Congress's expansion of the credit, once referred to the EITC as "the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress."
But that was before the far right took over the Republican Party. When the Democrats tried to expand the credit a few years ago, the current crop of Republicans called it, among other things, a welfare program and socialistic.
There is some good news, though. As income inequality and stagnant wages have become more important to Americans, some of what we'll call the traditional Republican conservatives are more willing to challenge their Tea Party brethren's rhetoric on the EITC. So perhaps we'll see some progress on this front at some point in the future.
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