Charlie Rose with Warren Buffett: Stop Coddling the Super-Rich
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If he holds true to form, he's also got a way to make money from other people paying higher tax rates. (He has investments that depend on the estate tax and has arranged things so his estate won't be taxed.)
If he think that his tax rate isn't high enough, he's free to write a check.
How about a tax that will hit him? For example, he likes to hold stocks "forever" and does a lot of tax-free exhanges, so there's "never" any tax on the gains. Why not require holding companies, like Berkshire, to do a "wash sale" and pay the resulting taxes on the oldest 5-10% of their portfolio every year. That way Buffet would pay some of the taxes that he thinks other people should pay.
Sounds to me like he's saying "I should be taxed more than $6.9 million." He's rather specific at the end of his piece:
But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.
From http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-...
That's unlikely, as those are the marginal bracket rates and the average rate for folks at the top of their bracket (let alone the bottom) are lower than the bracket rates. Their average rates were lower.
Meanwhile, his quoted rate is an average rate.
I'm pretty sure that he's wrong about their tax rates (or is using numbers that can't be compared to the rate he quotes for him).
From http://www.irs.gov/pub/irs-soi/08inratesharesnap.pdf .
"For returns reporting positive adjusted gross income, the top 1 percent of taxpayers had an average tax rate of 23.3 percent; the top 10 percent of taxpayers had an average tax rate of 18.7 percent; and the bottom 50 percent of taxpayers had an average tax rate of 2.6 percent."
Supporting data is at http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96679,... .
As for "writing a check", I believe Buffet might point out that no one person can, through individual expenditure, fix the problem. He's out to fix the system.
He's a competitive businessman. He doesn't mind -- would welcome -- contributing more to the financial well-being of our government and thereby country. However, he wants to do it on a level playing field.
Businesses and businesspeople piss and moan about expenses. But Buffet's message is the meat behind the whine: If the playing field is level, people will figure it out, and the smart and savvy players will still succeed -- because they are not tying one arm behind their back while giving their opponent a nine iron.
I'd say that's a big part of his point about the current revenue system for the federal government (and many states', I would guess). The small player is cuffed while the big player has sprouted extra arms (for grabbing).
I don't agree, or blindly accept, all that he has to say, and when you look behind some of his influence and advice, it certainly has played well into and payed out for his/Berkshire's own investments.
But the man has a point: You have to pay for the things you use -- and that includes the rich. And you don't exist, nor succeed, in a vacuum. So (whiny Mini-Me's), stop your caterwauling and fix the country. And "normal" people: Stop electing these idiots (or their tools).
[I realize this comment may have started to sound political. But we're discussing what Buffet means with his comments, and this is my take on that.]
Be careful there. If he spends his money better than the US govt, then isn't it possible that other people spend their money better than the US govt?
If so, then why are we giving their money to the US govt?
The government and the gates foundation do different things, and there can be a need for both.
When you try to make the rules of the game better, you don't personally start playing by the new rules, you try to make the rules of the game better.