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"...it's nice to have friends in high places..."
Warren Buffett has distinguished himself as a prominent American investor and philanthropist. As one of the world's wealthiest individuals, his opinion on economic matters is often sought by politicians and media elite, alike. On Sunday, Buffett penned an op-ed piece for the New York Times in which he, once again, unleashed his viewpoints on taxation as it pertains to America's "super rich."
Distinguishing himself as a major opponent of tax breaks for the wealthy, Buffett (who coincidentally endorsed Obama during the 2008 presidential campaign) writes:
While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.
The famed investor has been sounding off on his opinions on tax rates for years. Watch his 2007 interview with NBC News, below, where he makes similar claims:
Although he admits that "it's nice to have friends in high places," Buffett also contends that the wealthy can and should contribute more tax revenue to the federal government. He admits that last year he only paid 17.4 percent of his taxable income, a rate that is much lower than that of the middle class.
Additionally, he writes that when taxes were higher in the 1980s and 1990s, it did little to deter him from investing. In the end, he says that the wealthy don't mind taking on more of America's tax burden, especially with so many of their brethren in the lower and middle classes feeling the brunt of the economic pain. Below, watch a 2010 interview where he, again, makes these feelings known:
Toward the end of his article, Buffett begins to discuss the 12 congressmen and women who will be tackling the nation's finances. Interestingly, he begins to sound alarms that sound similar to the Obama administration's, adamantly calling for tax increases on the wealthy. But, in contrast to Obama's proposals to tax individuals who exceed $250,000, Buffett's benchmark is much higher. He writes:
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.
Considering this proposal, Buffett targets both the wealthy and the "super wealthy." Although it is somewhat more conservative than Obama's stated plans, it will likely still cause angst among conservative Republicans who do not wish to see taxes raised in a down economy.
Regardless, Buffett's words do carry weight, considering that he, too, would be impacted by the results of his own proposals. One important question to ask, though, is why Buffett takes advantage of loopholes. Considering his disdain for low taxes, wouldn't it make sense for the investor to avoid exploiting these gaping holes in the tax system?
Or, rather than raising rates, why not close these exemptions and devise a more palatable and easy-to-employ tax system for all income brackets, including those deemed "super wealthy?" These, of course, are simply questions worth considering, as it seems Buffett, having such a low personal tax rate, is currently taking advantage of loopholes and incentives (the very loopholes and incentives that may be causing the inequalities he has such disdain for).
(h/t Huffington Post)
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