Warren Buffett has changed his argument for soaking the rich, The Wall Street Journal reports.
Buffett now justifies his claim that the rich don't pay enough taxes by pointing out that in 2008 the 400 highest-income Americans paid only a 21.4 percent tax rate on an average of $227 million in income.
Buffett uses the tax returns of a mere 400 people to justify a tax increase on hundreds of thousands of Americans who aren't rich.
However, according to IRS data, in 2007 roughly 391,000 taxpayers reported income exceeding $1 million, and more than 300,000 of those had business income and met the Treasury Department's definition of business owner, making them the economy's main job creators.
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Those millionaires paid an average tax rate of 22.2 percent in 2007, compared to the average rate of 9 percent paid by those earning between $50,000 and $100,000.
Because President Barack Obama's tax increase would hit filers who make only $200,000 a year, Buffett is lending his popular credibility to raise taxes on millions of the non-rich — and, if history is to be learned from, to stick millions of Americans with another minimum tax.
The Alternative Minimum Tax passed in 1969 after a similar anti-rich furor about 115 millionaires who had paid no income tax in 1967. Now it applies to millions of middle-class Americans each year.
Forbes magazine reports that, while the U.S. version of Alternative Minimum tax requires taxpayers to calculate their taxes two different ways and pay the IRS the maximum amount of money from the two returns, Hong Kong gives taxpayers the option of calculating their taxes two different ways and lets taxpayers pay the lesser amount.
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