Well-known investor and business magnate Warren Buffett has published a bold op-ed piece in the New York Times. He said he supports having a minimum tax on the wealthy—including himself, of course.
Warren Buffett’s article walks us through the math that’s involved. He said that America’s wealthiest hit a new group record of $1.7 trillion this year, according to The Forbes 400. He also said that “a huge tail wind from tax cuts” has helped them widen the gap between the ultra-wealthy and the middle class.
According to Warren Buffett, America’s wealthiest earned an average of $202 million in 2009, which is around $97,000 per hour for a 40-hour work week. However, he also said that more than 25 percent of the country’s wealthiest individuals paid less than 15 percent of their income in federal and payroll taxes combined. Buffett said about half of them paid less than 20 percent, and some didn’t pay anything at all. In 2009 the average tax rate paid by this group was around 19.9 percent.
He compared the 2009 tax rate paid by America’s wealthy to the rate they paid in 1992 before the Bush tax cuts. He said back in those days, they paid around 26.4 percent of their adjusted gross income.
Warren Buffett’s Proposal
Warren Buffett has a proposal for President Barack Obama and Congress. In his op-ed piece he said, “I support President Obama’s proposal to eliminate the Bush tax cuts for high-income taxpayers. However, I prefer a cutoff point somewhat above $250,000 – maybe $500,000 or so.”
He also wants Congress to put a minimum tax on those with high incomes. He suggests “30 percent of taxable income between $1 million and $10 million.” He said that these rules will prevent the ultra-wealthy from paying tax rates that are far less than what the middle and lower classes pay. In addition, he also said that the U.S. should dump carried interest arrangements, which make it possible for labor income to be turned into capital gains.