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This reminds me of the article a few years ago that indicated that Warren Buffett had a lower effective tax rate than his secretary, even though he made heaps more. http://www.timesonline.co.uk/tol/money/tax/article1996735.ec...

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That was because he's counting capital gains. Capital gains are the tax you pay based on the price of a stock, which is based on the net present value of the company's dividends (taxed at 15%), which are paid out of its profits after taxes (35%). So it looks like the taxes he's paying on the extra earnings of Coca-Cola are about 53%.

At least he doesn't pay FICA taxes on that. On the other hand, the capital he invests does allow companies to hire more people, who do pay taxes.

The utility-maximizing way to tax Mr. Buffett is at 0%. He'll invest it effectively, it will grow the economy, more jobs will be created, and we'll end up with more wealth to squander through silly redistributive schemes.

Nice try Ronnie, but I highly doubt Mr. Buffet is ignorant enough to take profits he intends to re-invest as income. These likely stay within a holding corporation that re-invests this money and does not pay taxes on the gains. This is the way the system exists now and the way it should work.

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