World

I should pay more tax, says US billionaire Warren Buffett

by ifindtrends | October 31, 2007 at 06:40 pm

549 views | 10 Recommendations | 5 comments

Andrew Clark in New York
Wednesday October 31, 2007
The Guardian

Warren
Buffett, the famous investor known as the "Sage of Omaha", has
complained that he pays a lower rate of tax than any of his staff -
including his receptionist. Mr Buffett, who is worth an estimated $52bn
(£25bn), said: "The taxation system has tilted towards the rich and
away from the middle class in the last 10 years. It's dramatic; I don't
think it's appreciated and I think it should be addressed."

During an interview with NBC television,
Mr Buffett brandished an informal survey of 15 of his 18 office staff
at his Berkshire Hathaway empire. The billionaire said he was paying
17.7% payroll and income tax, compared with an average in the office of
32.9%.

"There
wasn't anyone in the office, from the receptionist up, who paid as low
a tax rate and I have no tax planning; I don't have an accountant or
use tax shelters. I just follow what the US Congress tells me to do,"
he said.

Mr Buffett also took a pot shot at hedge fund managers.
He said: "Hedge fund operators have spent a record amount lobbying in
the last few months - they give money to the political campaigns. Who
represents the cleaning lady?"

His intervention comes amid an
increasingly rancorous debate on Capitol Hill about tax. Shortly after
taking office, President Bush pushed through $2 trillion in temporary
tax cuts, including sharp reductions for high-earners. These expire at
the end of 2010 and the White House wants to renew them.

A
leading Democrat, the Harlem congressman Charlie Rangel, published
alternative plans this week that would impose a 4% surcharge on people
earning more than $200,000 a year, while delivering tax relief to 90
million working families.

Republicans say the net effect would be
a $2 trillion tax increase that would hurt small businesses and
farmers. Meanwhile, Mr Buffett's remarks drew a robust response from
the US Chamber of Commerce, which said the top 1% of US earners
accounted for 39% of tax revenue - and the highest earning 25% of the
population delivered 86% of the tax-take.

The chamber's chief
economist, Martin Regalia, said: "Mr Buffett has made an awful lot of
money and if he wants to pay more taxes, I think that's fine. But I
think he should get his facts straight."

He added: "There's no
question in my mind: if you were to impose [the Democrats'] tax
increases, you would see the US go into a recession."

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BigT

flagged this story as Good Stuff

at 18:55 on October 31st, 2007

ifindtrends, good stuff.

I've read almost every book about Mr. Buffett and think that he is a genius investor but this isn't investing. If he thinks he should give more to the government then he should give more as a donation but leave everyone else alone.

ifindtrends

at 19:01 on October 31st, 2007

BigT, Thanks.

Yes I agree, we should all pay lower taxes. Especially when it is going straight to a war. But I will hold my tongue on how I feel about that.

I think he was trying to make more of a point that the average person pays a higher tax rate than he does and something seems wrong about that. I am glad somone of his stature or wealth is standing up and saying something.

ifindtrends

at 18:57 on October 31st, 2007

My comment on this is that ehy don't we raise the "rich" peoples taxes by 5% and lower the average to moderate incomes taxes by 5% would'nt that make sense and not 'make our country go into a recession'?

I would assume that it would trigger the economy because people would have a little extra dough in their pocket. When the richest people in the world have the money, they are not spending it at "small businesses", they are investing in oil and large companies that stand to profit even more!

BigT

at 19:11 on October 31st, 2007

First, almost half the country doesn't even pay income taxes so I will agree on decreasing their tax bill by 5% since it equals zero dollars.

Second, what do you consider rich? If it is what Rangel says, $200,000, then most people who make that much money are small business owners. Even if you want to say that some of these people are medium to almost large business owners they would be dwarfed by the number of small business owners.

Just take a look at the stock market. There's a Fortune 500 of the largest companies in America. There's also the Russel 2000 that tracks business' with a smaller market capitalization. So even in the stock market there are a lot more smaller companies then there are bigger companies. Furthermore, there's many more small businesses then there are public companies traded in stock markets.

Lastly, raising taxes on the "rich" by 5% would take trillions of dollars out of the economy. I recall one example of taxing only the rich that will illustrate my point rather nicely. The government once seized upon the wonderful idea of adding a tax to any goods that sold for more than a certain, high dollar amount. I think it was even called the yacht tax because it taxed luxury items like yachts and Bentleys.

What ended up happening was that the luxury goods market dried up and many people ended up losing their jobs because the taxes dried up all the demand.

The problem with our government is not that it doesn't get enough money; when you count the federal, state, and local governments they are responsible for spending 40% of our GDP. The problem is the fact that they spend so much money. If we really wanted to solve our fiscal problems we would significantly cut back on our entitlement programs and let the people, even those that are successful, spend their own money the way they want.

ifindtrends

at 22:39 on October 31st, 2007

Interesting take. Thanks for your outlook. How about cutting out 5% off of our taxes? I am not going to say rich but let's say those who pay above the %25 mark. Mr. Buffet Sais he pays 17% approximately. Would this have a major effect on the economy? or more of an effect on the government.

Now that I think about it, that really makes sense what you said. Cutting back on the RIGHT part of government spending is the key I think. Here in San Diego, (one thing they probably never mentioned on the evening news) is that we are short firefighters because there were cuts in spending for the police and fire depts. Yet, Our government officials a little higher up have been caught in massive fraud invetigations using taxes, lavish spending habits and trips, and probably a few other things I am not aware of.

So even thought it will probably never happen, maybe lowering higher paid government officials' pay and spending and and providing the public with a tax cut might help the economy?

Oh wait, I forgot about the 2 trillion dollar war, but my hypothosis is (if the war was not costing that much)

I don't know, I am so fed up with the bull-S from the government. I am very thankfull for what I have so don't get me wrong, I just like to discuss these issues out of frustration.

Thanks for your views.