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August 17, 2021

Warren Buffett demands to pay more taxes

Warren Buffett, to be sure, is not your average tycoon.

169849_tax Yes, the investing guru is among the world’s wealthiest (officially third this year, according to Forbes) but he’s decidedly unique even among the stinking of the stinking rich.

For instance, not only does he look like Orville Redenbacher, but he appears to live just like any old moth-ballin’, Werthers-suckin’, change-rattlin’ 80-year-old. Despite a fortune of $47 billion, he’s lived in the same modest Nebraska home he bought for $31,500 in 1958.

Still, there is yet another characteristic to the Berkshire Hathaway boss that is dissimilar from the world’s billionaires: he wants to pay more taxes.

Certainly, there are flaws in how the rich are taxed in the U.S. (just Bing “Bush tax cuts” and get ready to read) but in spite of much hand-wringing, little is done to fix it.

So Buffett took to the New York Times over the weekend, publishing a self-penned editorial on why he, among other wealthy Americans, should pay more taxes.

Three things about the editorial, which can be found in full here:

1) Buffett’s pen name is “Warren E. Buffett,” which sounds somehow even more respectable than just “Warren Buffett.”
2) He refers to himself as “mega-rich” several times, which he is, but still …
3) And the following tax calculation, which is obtuse, immoral, wrong and surely to get you upset.

“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,” Buffett writes. “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.”

Those last numbers probably ring familiar with you, and in a perfect world, maybe, everyone should pay at the same tax rate, regardless of income.

Yet things get entirely trickier when we start talking about tax brackets that need to consider annual income sums getting into the billions, so it’s not incredible to think that Warren E. Buffett’s editorial, while candid, may not accomplish anything at all.

By Jason Buckland, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...