Paul L. Caron
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Monday, November 22, 2010

Warren Buffett: Rich Should Pay 'A Lot More' in Taxes

Celebrity Tax Lore, Tax | Permalink

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Tracked on Nov 22, 2010 4:25:16 AM

Comments

There's nothing at all stopping Mr. Buffett from paying more taxes NOW. He can stop taking deductions, change his filing status, heck, report MORE income than he's actually earned. I'm sure if he made his tax return public, he'd have no shortage of ideas of how to increase his taxes without waiting for the government to do it for him.

Posted by: Pete Terranova | Nov 22, 2010 3:25:32 AM

At the individual level, there is a lot more that Mr Buffet and the other "tax-me, I am rich" crowd could do to show a genuine love for wealth redistribution, including adopting a comprehensive strategy of unilateral (tax avoidance) disarmament. At the public policy level, could they not at least concede that there is a universe of difference between the "richness" that he and his "really rich" pals experience, and that the rest of us "tax code rich" do. May be he should propose equalizing after-tax disposable income.

Posted by: MG | Nov 22, 2010 5:42:58 AM

I wholeheartedly agree. We should dismantle half of the suffocating regulatory state so the rich can invest more of their money in new business and make fistloads of cash upon which they can pay taxes!

On a serious note at least 1 good thing has come out of the Deficit Commission. Most of our tax expenditures should be dismantled, and those do favor the rich - #1 culprit being the mortgage deduction.

Posted by: Todd | Nov 22, 2010 5:56:07 AM

If anyone makes as much money as Buffett, I sure won't stand in their way of paying more taxes.

But it is repugnant that one super-wealthy person can allow themselves to be used as a poster-boy by those who want to raise taxes on folks making a lot less money than Buffett. The key issue here is who is "rich". How much money do you have to be making and under what situations, before higher rates should be imposed.

In fact, I have no real concern if billionaires (i.e. annual AGI over 1 billion)have a marginal rate of 50%. Go for it. But at $250,000, you may not be middle class, but you sure shouldn't be paying at the highest bracket. Putting barricades to wealth accumulation down that low is a sure way not to get many more billionaires. But maybe that is Buffett's design...he relishes all the attentuion as one of the richest people in the US and doesn't like the idea that he may be knocked out of the "winner's circle" by future up-and-comers. Congress hasn't the backbone to go after just the really super wealthy...too many campaign donors in those ranks, who have the same malady as Buffett.

Posted by: ruralcounsel | Nov 22, 2010 6:08:29 AM

All the entertainers and other people who think they should be giving more money to the Government just send the check to the following address. Lets see if any of them follow up on their rhetoric

Gifts to the United States
U.S. Department of the Treasury
Credit Accounting Branch
3700 East-West Highway, Room 622D
Hyattsville, MD 20782

Posted by: Ken | Nov 22, 2010 6:55:36 AM

We need two tax rate schedules - a higher one for people wanting to raise taxes on everyone and a lower one for people who believe that the government is already getting too much.

Posted by: Woody | Nov 22, 2010 5:28:23 PM

It seems to me that Warren Buffet's problem isnt that he thinks *he* isn't paying enough, rather that everybody else isn't paying what he thinks they ought to.

The number of people who not only pay nothing, but actually get back money they never paid in, has grown. Last year, EIC paid out for up to three kids per household. That's not a refund, that's welfare.

Nobody should have to pay a third of their income in tax.

Posted by: Barbarous Fromsville | Nov 22, 2010 7:38:35 PM

Sigh. OK, here we go. The overall tax rate in the U.S., all included, is about 28%, according to the Heritage Foundation (very conservative), and the OECD. See http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP

Do you pay more than 30%? Remember, the number includes not only income tax, but also social security tax, sales tax, property tax, etc. So do you pay more than 30%? I do. Well, how can the average be 30% then? Because for every dollar I pay more than 30% on, someone else is paying less than 30%. If I pay 50%, there is another dollar out there that pays 10%. The average of the two is then 30%. Who is paying less? Warren Buffett, for one, and he knows it. He told Tom Brokaw in an interview on Oct. 30, 2007: "I'll bet a million dollars against any member of the Forbes 400 who challenges me that the average (federal tax rate including income and payroll taxes) for the Forbes 400 will be less than the average of their receptionists." (You can see and read the whole conversation in the aptly-named WBW Post Warren Buffett and NBC's Tom Brokaw: The Complete Interview, http://www.cnbc.com/id/21543506/.) No takers so far.

Now, since giving Warren a tax break means that you have to pay more, you will never become rich by working hard and saving. Why not? Because while you are little, the full burden of supporting the government is being placed squarely on your shoulders, so that we can have low taxes on Warren Buffet. Since you are paying so much of the cost of government, you will have great difficulty saving anything.

Of course, once you arrive at great wealth, low taxes at the top will keep you there, but getting there requires some spectacular success, and not merely the virtues of hard work and saving. This is why Warren Buffet has said that "It's class warfare, my class is winning, but they shouldn't be.", CNN Interview, May 25 2005, in arguing the need to raise taxes on the rich, and again "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning.", New York Times, November 26, 2006.

By the way, Warren Buffet is also famous for putting no effort at all into tax planning. He simply reports his income and pays the tax imposed. The quote is: "I have no tax planning, I don't have an accountant, I don't have tax shelters. I just do what Congress tells me to do."

Posted by: JeffreyK | Nov 23, 2010 9:37:07 AM