Warren Buffett demands to pay more taxes
Warren Buffett, to be sure, is not your average tycoon.
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
Posted by: Ian Malcolm | Aug 17, 2021 10:49:35 AM
As others have pointed out, there is nothing to prevent Mr. Buffet from making a donation to the U.S. Treasury and I encourage him to do so.
Does Mr. Buffet really feel that governmental spending is more productive than that of private individuals ?
I think that Mr. Buffet should refrain from attempting to spend other peoples money...the government already does too much of that.
Posted by: Fino | Aug 17, 2021 11:32:59 AM
Why do people feel or get surprised about the American fiscal pickle. With only two political
patries, The Republican has not offered a single useful idea to America for as long as I can
remember. Their mantra cut taxes all wil be cured is silly and most Americans know it. The
Democrats, no one knows the ( who is) are all over the map.
And finally, Americans are the only Country on this Planet to believe that one man given two
years is enough to cure all that ails the great Republic, and I believe the Republic is a good,
Country.
Posted by: Shawn | Aug 17, 2021 1:01:58 PM
Being from Canada, I, and my fellow countrymen, pay considerably more taxes than our American counterparts. Many complain. Many cry out "Lower taxes!" and our current Conservative government(s) tend to respond as requested, following the "Reagonomics" model. I see us going the way of our southern neighbours, flirting with bankruptcy, if we fully embrace the notion that increased spending + fewer tax dollars=balanced or even surplus budgets. Yes I pay significant taxes, but I live in a great country with significant benefits. We should all pay our fair share- it's stupid that millionaires pay less tax than the worker breaking his back for 10hrs/day. However, greed is not easily curbed.
Posted by: Gulp | Aug 18, 2021 2:03:51 PM
Shawn, you are wrong. The rich don't pay less tax than the worker breaking his back. The rich guy pays way more...both in absolute terms and in relative terms. Which is a little unfair...because the rich guy pays a lot more for roads, hospitals, police, welfare etc but he doesn't actually use them more.
Next time you're on your tax software play arouind with the numbers a bit. Pretend you're an average guy making $40k year and look at your payable tax. Then pretend you're a "rich guy" making four times that ($160k). You'll see that the "rich guy" pays more than 4 times as many taxes as the "average" guy.
People who work harder, or are smarter or better educated deserve to make more money than "other" people. If you work twice as hard you deserve twice as much money...but the tax system doesn't allow that.
I'm reminded of a couple of famous sayings although I may not have the exact wording.
The self-righteous feel a great debt to his fellow man, which debt he proposes to pay off with your money.
Progress will cease to exist when you take away from those who are willing to work and give to those who are not... by Thomas Jefferson
Posted by: Pete | Aug 18, 2021 10:40:38 PM
I'm Canadian, too. My wife and I are in that top 1 to 0.1% category. We pay a lot more tax into the system than we get out of the system but that fundamentally builds us a great country. The math doesn't work out any other way---I'd love to pay as much tax as the guy working at Mickey D's but that's not going to be enough to fund hospitals, decent schools, roads and build a country for my kids that's going to be competitive with China/India/Brazil...
I just don't get it. How does America think it's going to compete in the future if it refuses to pay taxes and sucks funding out of all these things that build a healthy, educated, modern country?
Posted by: Zach | Aug 19, 2021 1:01:42 PM
I think, the bit that was done on the Daily Show, despite being comedic, really point out the positives of taxing the super rich more. At the end of the day they're still super rich, but maybe they can't afford to buy a second or third yacht. Which, I know would be terrible.
I can't remember exact numbers, but something about taxing the top 1% of the rich more over ten years would bring in 700 billion, while taxing the bottom 50%, already paying more tax in terms of relative income, more would raise about 1.5 trillion. It's ridiculous in comparison..
they need to do their part in the economy. If i was in that income level, I'd hate to give more of it away, but at the end of the day, you still have more money than 99% of the people in your country and will still have everything you need, 10 times over.
And in regards to Buffett donating to the government, sure, it would help a little.
But even if he donated his entire fortune, that barely makes a dent in the debt, while if everyone contributes fairly, it's a much larger chunk. Hard times call for measures like this.
Posted by: Dana | Aug 22, 2021 6:33:00 PM
In response to Gulp:
I think it is completely offside to relate income to education levels and work ethic. There are many hard working people earning minimum wage and many lazy employees earning great wages in offices. There are also many people with accredited degrees that don't utilize it and many brilliant people that haven't had the opportunity for an education. Many kids today grow up in super rich families, they get their education, and get their good job - therefore their high paying salary and have hardly lifted a finger.
Also, contrary to what society says money is not the be all end all. How much of it do you really need before it becomes destructive to people rather than productive. If you don't want to pay taxes and keep all your money then go set up shop on an island by yourself. See how far you get. By giving up paying taxes you give up the benefits of living in a modern society. Fruits and vegetables in arms reach, numerous products and services, people to build your mansions and cook your food. Airlines to get you where your going...the list is endless. (Of course private business contributes to most of this as well, however, you're kidding yourself if you think the government has nothing to do with it)
At the end of the day, we are all sharing and living in this world together. The healthier we all are, the more contributions we can make.
Posted by: Gulp | Aug 24, 2021 1:22:31 PM
Dana, I agree and disagree with what you say...
- despite what you say I still think income is related to education and work ethic. Statistics show it over and over...that's why scientists make more money than retail clerks. It's not a perfect system...but it works most of the time. Google "education and income" and you'll find a slew of studies to prove what I said. And that's the way it should be...hard-working educated people should have more money or nobody would bother becoming a doctor.
- I agree that money is not the be all and end all. Greed is a nasty thing but it can be used to society's advantage. For example...the doctor who works extra weekends so he can afford a bigger house is still helping the patients he sees...his patients also benefit from his greed. But if you tax that doctor too much he may decide it's not worth his time to work on the weekend. And the union that goes on strike for more money also benefits from its own desire for more money.
- I also agree that we need to pay taxes to keep society going (although I think government needs to do a better job at being efficient). But my main point was that the rich pay more than their fair share of taxes. In Canada the top 10% of income earners pay half of all the income taxes...it's a statistical fact...look it up. If it wasn't for those "rich" people paying all those taxes all of the rest of our income taxes would nearly double!! To say that the rich don't pay their fair share is just a fallacy used by those with less money to justify the handouts they receive.
- I also agree with your statement about rich kids. I hate that some people get a head start in life. I congratulate people who are rich because of their hard work and effort. But I loathe those who are rich because of their last name.
Posted by: Dana | Aug 29, 2021 12:08:01 PM
I do understand that income should go in line with education levels and work ethic...and it does - like you say. I am a young adult currently working 3 jobs while attending full time university. All I can say is that I am very thankful that I am taxed less and have tax breaks becuase if I didn't I wouldn't be able to afford my education...therefore, not even having the chance at a higher income. So although I don't pay very much in tax, years down the road I will. The rich of the world take the brunt of it now - but I will pay my dues later in life.
All jobs are important in society. From the garbage pickers all the way up to the doctors. Someone has to play all of these roles. I don't think a garbage picker should make the same or even close to what a doctor makes, but it simply isn't possible for both to contribute the same amount of dollars to the government. If we were to lower the taxes of the rich the government would have very little to work with.
I think when you speak of lower income people or people with "retail jobs" you picture freeriders. There are a lot of people in these roles who aren't freeriding but simply working their butts off doing everything they can to make a better life and do more for their families, and hopefully they to will earn a higher income one day and provide for the others that weren't born into money.
Finally, whatever happened to the people that became doctors because they wanted to "help people". Why do people pick jobs based on the paycheque. Maybe that explains many of the issues we see in health care.....but that's just a whole other can of worms.
Posted by: Pete | Aug 30, 2021 4:33:09 PM
I agree with Dana. Income mobility (the chance that a child will move out of his/her parent's economic strata---up or down) is highly linked to the availability of higher education. Canada's income mobility is amongst the highest in the western world while the UK and USA are near the bottom. So, it is paradoxical that the pro-American values movement to de-fund things like higher education effectively guts the American dream that anyone can get ahead by working hard.