Warren Buffett: I Want to Pay More Taxes!

August 15, 2011Personal Financeby EW News Desk Team

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While most individuals complain about paying too much taxes, billionaire investor Warren Buffett is adamant that his “mega-rich” friends and himself are not paying enough; and is demanding the US government to “stop coddling the super-rich”.

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"My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government to get serious about shared sacrifice," wrote the Oracle of Omaha in a New York Times op-ed piece on Monday.

The Chairman and CEO of Berkshire Hathaway added that many of his mega-rich peers were “very decent people” who “love America and appreciate the opportunity this country has given them.”

[qupte]As such, “Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.”

Buffett suggested that the 12 members of US congress tasked with rearranging the country’s finances should immediately raise rates on households with taxable income of more than US$1 million, with an additional increase for those making $10 million or more.

The third richest man in the world, with a net worth of over US$50 billion, also disclosed the amount of taxes he paid in the previous year.

The income tax I paid, as well as payroll taxes paid by me and on my behalf — was US$6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.”

Unlike most Americans, Buffett along with the country's wealthiest individuals make the majority of their income from investments. The capital gains and dividends from these investments generate much lower taxes as compared to wages. According to Buffett, 88 out of the top 400 Americans reported zero wages in 2008, though every single one of them reported capital gains.

Buffett also addressed potential concerns that higher taxes would discourage investments and job creation.

“I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.”

Read Warren Buffet’s Full Op-ed Piece in the New York Times

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