Chart of the Day: Transfer Payments
Warren Buffett's recent column focused mostly on the "sources of government revenue" and the income taxes collected from the "super-rich," which he suggests should be immediately increased with higher rates on incomes above $1 million to reduce the national debt and deficit.
But there's also the other side of the equation - the "uses of government revenue" that Mr. Buffett did not address. The chart above shows "transfer payments as a share of government spending" from 1929 to 2010 (BEA data here), which has doubled from 22% in 1966 to 44% last year. If this trend continues, we might reach a point where no amount of taxation on the rich or super-rich can finance an unsustainable "transfer society." At some point, the mega-rich might just "go Galt."