Warren Buffett And Taxes | Tax Me More!

Warren Buffett And Taxes | Tax Me More! – Warren Buffett has long been on a crusade to raise the taxes paid by people like himself. Usually, Buffett points out the he pays a lower rate than his secretary, on account of she pays Social Security taxes on all of her income and he only on a fraction of his. But that’s always struck me as silly: so long as we pretend that Social Security and Medicare are self-funding, it makes sense to cap taxation; after all, we cap payouts.

In an op-ed in yesterday’s NYT (“Stop Coddling the Super-Rich“) he makes a stronger case. Along with emotional nonsense like “While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks” – it’s just a non-sequitur—Buffett points to actual problems in the tax code:

Warren Buffett And Taxes | Tax Me More!

Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

Last year my federal tax bill – the income tax I paid, as well as payroll taxes paid by me and on my behalf – was $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.

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine – most likely by a lot.

It’s presumably possible to close off some of the loopholes in the system to collect more money. And it’s almost certainly the case that many of them actually ought be closed out of fairness; whether doing so is possible under our current political standoff is another question entirely. But any system where taxation of income is the primary means of collecting money for the Treasury and also the primary means of incentivizing certain types of economic conduct while penalizing others is going to be ripe for manipulation. And those with the most money for lobbyists, lawyers, and accountants are likely to come out on top.

Warren Buffett And Taxes | Tax Me More!