Put your Money where your Mouth Is

I should pay more tax, says US billionaire Warren Buffett
Andrew Clark in New York
Wednesday October 31, 2007
The Guardian

The United States' second-richest man has delivered a blunt message to the Bush administration: he wants to pay more tax.

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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Certainly Warren Buffett could pay more if he so choose to do so. Why, any individual who feels they are undertaxed could pay more in taxes. Simply write out a check in whatever amount you deem to be just and mail it to the attention of the IRS.

Of course, most individuals subscribing to this philosophy would never actually commit to taking such action. And why?

Because, they are compelled to make you take their position by forcing you to pay more as well. They would not do so voluntarily unless you as well did so. This is socialism. It is a collectivization view. It is a view which says that your wishes must also become my wishes.

Now, I ask you, what good is having principles if you as an individual are not willing to stand on them individually? If Warren Buffett feels so strongly that the wealthy ought to have a higher tax rate or pay more or if Al Gore thinks we ought to be conserving energy and be good stewards of the environment, then perhaps the best way to advocate these principles which you've attempted to adopt would first be to practice them no?

I for one do not advocate that the wealthy should have a higher tax rate. I've stated time and time again, with factual support, that the wealthy are the ones that shoulder the greater percentage of the overall tax burden to begin with. Moreover, the concept of "getting ahead in life" is negated by having an individual pay more as their income grows. If Warren Buffett and I go to purchase a car, or a loaf of bread, we are not asked what our salaries are. We pay the same for such goods. Government ought not be any different.

Should middle income earners have a lower tax rate? Without a doubt. However, I see less and less of a leadership to advocate for that than I do for a higher tax rate on the wealthy (hardly a sensible way to get government back within its means).

So, what do you say Warren? Are you willing to stand on the principle of which you advocate? Or, are you a mere advocate for collectivism; a mouthpiece for society with total disregard to the individuals within that society?