Buffet explains the need for progressive taxes

Yahoo reports on his comments regarding healthcare:

"Billionaire Warren Buffett says health care costs are a major drain on U.S. businesses and act like an "economic tape worm."

The head of the holding company Berkshire Hathaway Inc. said Monday on CNBC that America's health care system needs fundamental reform to attack costs because it's not practical to continue devoting roughly 17 percent of the nation's gross domestic product to health care.

Buffett says much of the rest of the world is paying about 9 percent of their GDP on health care and have more doctors and nurses per person.

He says he hopes Congress will develop a new health care reform proposal that will restrict costs more than any of the current plans would."

The problem is that Buffet, who is probably paying only a 15% capital gains tax, rather than a higher progressive income tax, sees the health care costs by government, as a cheaper alternative than handling the problem inside the firm or household. He does the calculation and determines that shifting the burden to government yields a gain for him relative to other taxpayers. Tax distortions cause debt cycles as firms pass wage costs on to government.