Buffett: My Secretary Still Paying Higher Tax Rate than I Am

Monday, 04 Mar 2013 02:38 PM

By Glenn J. Kalinoski

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Billionaire investor Warren Buffett will continue paying a lower tax rate than his secretary.

“Counting payroll taxes, I’ll probably be the lowest paying taxpayer in the office,” Buffett told CNBC.

“My capital gains rate will go from 15 to 23 percent and a fraction because of the 20 percent plus the 3 and a fraction percent,” he noted. “But if you look at social security tax, payroll taxes plus income taxes, I'll be a fair amount higher, say 8 or 9 points higher. But the differential between me and the rest of the office, not just my secretary, was greater than that.”

Editor's Note:
An $87,500 Tax Loophole Discovered by Cherry Hill Accountant

Of the top 400 richest people, who might be making $200 million or $250 million a year, maybe half pay an income tax rate of less than 25 percent, he explained.

Buffett continued to call for higher taxes on the wealthiest individuals.

“I don’t want to name some of my friends that are in similar low rates, but I think they should be paying at the rates that the people who work in this warehouse pay, and they still have a big break,” Buffett said.

“The big break is they don’t pay payroll taxes. If we take in $2.6 trillion this year, payroll taxes will be a third of that, roughly.”

The chairman and CEO of Berkshire Hathaway dropped out of the top three among Forbes magazine’s latest annual ranking of billionaires for the first time since 2000, falling to the fourth spot with a net worth of $53.5 billion, The Associated Press reported.

Mexico’s Carlos Slim was the planet’s richest man for the fourth consecutive year, with his net worth rising from $69 billion to $73 billion. The United States remained home to the most billionaires in the world at 442, according to the AP.

Though Buffett dropped in the Forbes rankings, he gained $9.5 billion, making him the second-biggest gainer. He said a minimum tax on very high incomes is a start in getting more equity in the tax code.

There should be a grand bargain instead of this battle between President Barack Obama and the Republican-controlled House of Representatives over government spending and taxes.

“When you have negotiations, the way to get things done is to have somebody on each side that can deliver,” Buffett said.

“If I’m in a labor negotiation, I want somebody from the labor union there, and when he says, ‘this is what my group will take,’ I know that’s good. And when I say this is what I can deliver, he knows I’m not going to get overrun by a board of directors,” he added.

“You can make a deal that way and you do it in private and you don’t go out and make speeches. When you negotiate, you really need to get it down to a couple of people and that requires being able to speak for your constituency, and both of them [Obama and House Speaker John Boehner, R-Ohio,] have trouble.”

Editor's Note: An $87,500 Tax Loophole Discovered by Cherry Hill Accountant

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