Berkshire Hathaway CEO Warren Buffett, Earth’s second-wealthiest inhabitant, complains that last year he paid only $6,938,744 in federal income taxes, which is just 17.4 percent of his taxable income. Despite earning much less than he did, 20 of his staffers had tax burdens which “ranged from 33 percent to 41 percent,” Buffet recently wrote. But rather than work to cut his colleagues’ taxes, the 50 Billion Dollar Man wants Uncle Sam to hike his liability.
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Buffett is not alone. Other loaded luminaries also lust for higher taxes:
• “George Soros says he agrees and congratulates Warren Buffett,” the financier’s spokesman told Reuters. “The rich are hurting their own long term interests by their opposition to paying more taxes.”
“I’m Matt Damon.”
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• “It’s criminal that so little is asked of people who are getting so much,” Academy Award winner Matt Damon told video journalist Nicholas Ballasy July 30. “I really don’t mind paying more taxes,” the actor added. “Why don’t you just tax the really rich — guys like me — or raise it to 50 percent after $50 million?”
• Best-selling novelist Stephen King, author of The Shining, Misery, and numerous other spooky books, seems haunted by disappointment at not sending more of his royalties to Washington. “As a rich person, I pay 28 percent tax,” he told a Florida rally last spring. “What I want to ask you is, Why am I not paying 50 [percent]?”
• A group called Patriotic Millionaires asked Pres. Barack Obama, Senate Democratic leader Harry Reid of Nevada, and House Speaker John Boehner (R., Ohio) for higher taxes on incomes above $1 million. “We make this request as loyal citizens who now or in the past earned an income of $1,000,000 per year or more,” states their July 21 letter, which bears 137 signatures. “Please do the right thing for our country. Raise our taxes.”
This plutocratic taxophilia springs from a myth that is as enduring as the Loch Ness Monster. Assistant House Democratic leader James Clyburn of South Carolina echoed it faithfully when he told MSNBC on July 25 that “98 percent of the American people are carrying this [tax] load while the other 2 percent seem to be getting away scot-free.”
The facts easily torpedo this unsinkable rubbish.
In 2008, the latest Internal Revenue Service figures confirm, the top 1 percent of tax filers earned 20 percent of adjusted gross income and paid 38 percent of income-tax revenues. The top 5 percent earned 34.7 percent of AGI and paid 58.7 percent of income taxes. The top 10 percent earned 45.8 percent of AGI and paid 69.9 percent of income taxes. Meanwhile, as the Tax Foundation’s analysis revealed, the bottom 50 percent earned 12.75 percent of AGI and paid 2.7 percent of income-tax revenues.
Regarding all federal taxes (capital gains, corporate, death, dividends, excise, income, payroll) an April 2009 Congressional Budget Office study found that for 2006 (the latest numbers), the top 1 percent paid 28.3 percent of all federal taxes. The top 5 percent paid 44.7 percent, and the top 10 percent paid 55.4 percent of taxes. The bottom 40 percent paid just 4.9 percent of all federal taxes in 2006.
Rich liberals seem frightfully ignorant that the data very clearly demonstrate how the tax code soaks the wealthy, while letting the economy’s bottom half escape scot-free.
Three comments: (1) There are not enough super-rich people to make a dent in the deficit, which is due to overspending. (2) Why isn’t $2 trillion in revenue, most of it paid by the wealthy already, not enough? (3) No one is stopping Mr. Buffett and his civic-minded, super-rich friends from writing checks to the IRS or the Social Security “trust fund” right now. If you want to do it, go ahead. Put your money where your mouth is, big guy.
A fourth comment (just couldn’t resist): Why is allowing the rich to keep some of their money considered to be “coddling”? How insufferably condescending.
$2 Trillion is not enough because entitlement spending consumes over half the budget and is increasing rapidly. And no one, not even the Tea Party diehards, wants to make meaningful cuts to Medicare etc.
So, 137 members of "Patriotic Millionaires" want to pay higher taxes? Fine. Pass a law that applies only to them. (Would that be unconstitutional? Sure, but so are half the laws on the books.)
Mr. Murdock says we are "letting the economy’s bottom half escape scot-free"? What? By his own numbers, the bottom half of U.S. taxpayers earn only 12.75% of the AGI. That is not a lot of money to be spread around so many people. That is why the upper 50% pay so much of the taxes: it earns 88% of the money. I don't think the bottom 50% are getting as good of a deal as Mr. Murdock implies.
If Mr. Buffet and those of his ilk are wont to additionally support our economy, why don't they contribute the additional amounts they believe they owe to the establishment of a non-profit business that would employ some of our unemployed Americans.
By my calculations, if Mr Buffet contributed to the 41% level he says some of his employees did, that would provide in excess of $9 million for such an effort. That could employ many workers and pay them taxable wages. Their subsequent expenditures to support their families would provide resources for others to be employed in other jobs and also paid taxable wages. And, all those unemployed would then be removed from the unemployment roles and the consequent governmental expenditures reduced!
If they are so smart, why didn't they think of that?
Free enterprise, putting folks to work is what we need, not more taxes for the government to spend on high speed rail, global warming and the like! Where are the leaders?
Not only has WEB deferred capital gains taxes on his personal fortune for decades, Berkshire Hathaway has billions of deferred capital gains tax on its books. And of course, WEB will pay little estate tax after he gives it all to charity.
WEB is a very wise man and avoids taxes as much as possible.
As Arthur Laffer noted, if WEB were really serious about increasing revenue from the ultra-rich, he would advocate a wealth tax on high net worth individuals.
They ask to be taxed more because they know it isn't going to happen. They're in it for public image, which I would imagine helps them make more money.
Mr. Buffett and others that feel so under taxed please feel free to ignore the tax tables provided by the IRS and your state and calculate your 2011 and beyond taxes @ the 90% tax rate. being careful not to take any deductions that would lower your tax rate under the heretofor agreed upon rate of 90% this includes the gift to the Gates foundation.(The last time I checked this is deductable)
And if you are so inclined you may also pay taxes on your total net worth @ the 90% rate this may assuage your Guilt. Not
A tax on those who publicly advocate raising taxes--the "Really Put Your Money Where Your Mouth Is" tax. The tax is equal to the amount of additional taxation you advocated. So, for example, Matt Damon wants 50% over $50m taxed away? Boom! It just happened--to him--as soon as he said it!
Fringe benefit: reduction of greenhouse gasses as hundreds of rich lefty blowhards are forced by their accountants to stop spewing hot air.
Mr. Murdoch:Why does someone just photocopy this call in the all the possible media and then mail it to every Dem.congress person. The conseratives would do well to put this in campaign literature for upcoing election and ads.While at the sametime using in their campaign spots.
Someone should tell Buffet to stick to what he does best not playing politics which he uses to enrich himself ie the banking problems of investment banks for which he is earning 10%. As a small stockholder in berkshire I do appreciate his investing accumen
Thank you for making a clear and concise opinion Lawrence
1 Lower everyone else's tax rate to Mr. Buffet's and the other billionaires' rates if they're paying such low rates.
2 Since Mr. Buffet thinks charities will do a better job of spending his estate than the government, let us poorer people have the same option by giving a tax credit equal to our tax liability if we donate an equivalent amount to charity.
How many people would take advantage of proposal 2? I would!
I am 67 years old and on Social Security and Medicare. I fully support Connie Mack's Penny Plan which would reduce whatever those programs pay me by 1% a year until 2017. We have to do something and we must all contribute. Even Paul Ryan's budget plan projected deficit spending until 2050. We have to cut actual spending, or our country will be a banana republic long before 2050.
