Warren Buffett - How Much Tax does Warren Buffett Pay?Well, not enough, according to the Oracle himself. His federal tax rate last year was $6,938,744 which included income tax and payroll taxes paid him and on his behalf. That sounds like a lot but it was only 17.4% which is a lower rate than the 20 other people who work for him in his office, who presumably are not billionaires and whose tax rate averaged 36%. Such is the crazy US tax system.
In a New York Times article Warren Buffett has urged U.S. lawmakers to raise taxes on Americans who earn over $1 million and says this would not adversely affect investments or jobs.
Like in the UK where David Cameron has famously said "we are all in this together" David Cameron and most of his cabinet are millionaires, in the US the leaders have asked for 'shared sacrifice.' "But" says Warren Buffett "they spared me." and his mega-rich friends too.
He also points out that some investment managers are taxed just 15% on billions of dollars of income, because they can classify their income as “carried interest,” while the middle classes are taxed up to 25%. Legislators in Washington feel compelled to protect the rich, as if they were "spotted owls or some other endangered species. It’s nice to have friends in high places" Buffet added.
Tax rates for the rich were in fact "far higher" in the 1980s and 1990s, yet almost 40 million jobs were added over the period from 1980 to 2000.
"You know what's happened since then: lower tax rates and far lower job creation," Buffett said. "People invest to make money, and potential taxes have never scared them off."Back in 1992, the I.R.S. started compiling data from the tax returns of the 400 Americans with the largest income.
"In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent. "
"you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.) "How many people would be affected if the US government listened to Warren Buffett's advice ?
There were 236,883 households making over than $1 million in 2009, with 8,274 making over $10 million, which out of a population of over 250 million is really not a lot, which makes you wonder just why the US government and some US voters seem so intent on protecting them.
Warren Buffett talking on July 8 about jobs