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Financial Planning > Tax Planning

Warren Buffett: Is he right?

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It was hard not to hear about billionaire Warren Buffett’s opinion piece in The New York Times on Monday, which urged Congress to raise taxes on the super-rich to help cut the federal budget deficit.

In the guest editorial, Buffett, the third richest person in the world with an estimated personal net worth of $50 billion, said, “My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.”

While Buffett’s federal tax bill was close to $7 million last year, Buffett said his federal taxes equated to just 17.4% of his taxable income, a lower percentage than “any of the other 20 people in our office.” Their tax burdens ranged from 33% to 41% and averaged 36%.

“While most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks,” Buffett said.

Buffett proposed raising taxes immediately for those making more than $1 million (236,883 households in 2009), including dividends and capital gains. For the 8,274 taxpayers who made $10 million or more, Buffett said they should be subject to an additional increase in their tax rate.

His comments quickly went viral on Google and Twitter, and an poll on the topic registered more than 20,000 votes in an hour. (95% agreed with Buffett that the super rich are coddled and should be taxed more.)

It will be interesting to see if the “Oracle of Omaha’s” comments have any effect on Republican presidential hopefuls, all of whom said during a recent debate in Iowa that they would reject any deficit-reduction deal that would raise taxes, even an approach in which spending cuts would outweigh tax increases by a 10-to-1 margin.

Do you have an opinion about Buffett’s comments or the current political debate about raising taxes to reduce the federal budget deficit? Please use the comment tool below and share your views.

To read more from Brian Anderson, click here.


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