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Buffett Wants to Pay Higher Taxes—on Less Than 1% of His Income

by the Center for Geoeconomic Studies
February 8, 2012

The U.S. Tax Code: Poorly Designed, but Progressive

In a now-famous August 14, 2011 New York Times op-ed, billionaire Warren Buffett called for tax rates to be raised “immediately on taxable incomes in excess of $1 million, including, of course, dividends and capital gains.” The key word here is “taxable.” In Buffett’s case, his taxable income is a mere 0.9% of his income held within Berkshire Hathaway, of which he owns 22%. His share of its 2010 pre-tax income was $4.2 billion dollars, taxes on which amounted to over $1.2 billion—a 29% rate. This income would be subject to tax again at the personal rate if it was taken out of the company, but since he has generously pledged to give away his fortune he would avoid the tax he wants to increase. As the bottom figure above shows, when all taxes are accounted for the U.S. tax code—however poorly designed—is in actuality considerably more progressive than Buffett’s storyline suggests.

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Post a Comment 2 Comments

  • Posted by Lee

    Perhaps he would not object to realizing his capitol gains BEFORE he can give his fortune away.

  • Posted by William Thayer

    Great article which points out Buffet’s hypocrisy.

    Let me point out another. Buffet thinks that government spending is GREAT. But evidently it is not great enough that he would consider leaving his fortune to the US government so they could spend it.

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