I have heard Warren Buffett claim on occassion that he is not taxed enough. However, now the crazy old coot has put it in writing in The New York Times for all to see his ignorance.
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.
Oh, where to begin!
Buffett is comparing apples to oranges when he compares his tax burden, based on capital gains, to the tax burden of his employees, based on earnings. For example, dividends and capital gains are both forms of double taxation, so he is being less than honest when he says he pays less, percentage-wise, in federal taxes. He also ignores the high corporate tax rate and the huge, punitive death tax.
Also, his characterization of the payroll tax is absurd. He is not forced to pay a heavy burden in payroll taxes because if he did, then Social Security would have to pay him huge returns when he retires. Payroll taxes are capped for the very reason of avoiding a huge retirement payout to the wealthy.
In the end, if all the taxes were calculated appropriately, I am certain that Buffett pays significantly more in federal taxes than those who work for him.
Besides, if Mr. Buffett does not think he his paying enough in taxes, hecould simply give more of his money to the federal government. There is nothing stopping him. In fact, there is a website where people can voluntarily pay extra money to the federal government.
The reality is, the “super-rich” do foot the majority of the taxes in this country, as I have pointed out before.
According to the IRS, in 2008, the top 1 percent of tax returns paid 38 percent of all federal individual income taxes and earned 20 percent of adjusted gross income, compared to 2007 when those figures were 40.4 percent and 22.8 percent, respectively.
The IRS also points out that during 2007, the top 1 percent had actually paid more in federal income tax than the bottom 95 percent.
So, while the top 1 percent earned 2o percent of all income that same group paid 38 percent of all federal income taxes, more than the bottom 95 percent.
In fact, Buffett’s call for higher taxes is nothing more than self-serving claptrap.
As Timothy P. Carney has pointed out several times, Buffett advocates for a higher death tax and then buys estates from people who don’t have enough money to pay the tax bill. He also owns businesses that rely on a complicated death tax in order to sell estate-planning services. Buffett also made about a billion dollars off of the Wall Street bailout by investing in Goldman Sachs on the assumption Uncle Sam would bail it out. He also is planning investments in ethanol giant ADM and government-contracting leviathan General Dynamics.
In the end, the solution is not higher taxes, as Buffett and liberals want, but a fairer tax code, perhaps a simple flat tax that eliminates double taxation and complicated tax shelters and deductions so we can all be sure that the rich and poor alike are paying the appropriate amount and also eliminating a large part of this class warfare in which the left like to engage.