Every so often Warren Buffett goes on TV and calls for higher taxes. This from the guy who’s paid, according to Forbes, perhaps less than $10 million in taxes, a tiny percentage of his $50 billion net worth. I say perhaps because, to the best of my knowledge, Buffett has never made his tax returns public.
Buffett is big-business, with his Berkshire Hathaway holding company stock selling (today) at $119,675.00 per share. Berkshire Hathaway has 1 million shares, which means that Buffett heads a company worth more that the gross national product of a few small Latin American countries.
How does Buffett manage to pay so little in taxes? For one, Buffett, who wants everybody to pay for big-spending big government, donates sizable amounts to tax-exempt philanthropies, such as the Gates Foundation. Forbes, again,
He donates appreciated Berkshire Hathaway stock — which costs him pennies on the dollar — to charity, and receives a fat, juicy tax deduction at the appreciated price without having to pay a capital gains tax on the appreciation. (And, note that the money actually sits in his own charitable organization.) He’s saving income taxes with the ordinary deduction so it’s essentially a tax shelter.
He builds up his massive net worth and doesn’t have to sell stock while deferring capital gains. When he does take a capital gain, it’s at a 15% rate, and he lives in a low-tax state.
Buffett has been known to complain that he paid taxes on the lower-rated capital gains rate rather than the higher income-tax rate. Well, play me the world’s smallest violin, Warren.
Mind you, I’m all for capitalism. America is the greatest country in the world because historically it afforded its citizens the ability to legally prosper and live in abundance. What I object to is billionaires who got their own aiming to prevent anyone else from attaining the same, or more, as they.
This latest time around Buffett was on ABC’s This Week, and told Christiane Amanpour that “People at the high end, people like myself, should be paying more taxes”,
The “high end”, by the way, in tax code terms, bunches together anyone making over $250,000/yr, whether you own one small restaurant or Berkshire Hathaway. If Warren were to gift you three shares of BH, he’d put you well over that amount.
Victor Davis Hanson wonders if Buffett has taken to preaching higher taxes in his later years as a form of penance,
Why did Buffett not become an advocate of higher taxes on those who make over $250,000 when he was in his twenties and thirties and desperately trying to pile up his first five or so million? Did he really pay astronomical income taxes at those astronomical tax rates in the 1950s and 1960s or seek to avoid them through capital gains lower taxes and write-offs? Why do so many of these zillionaires chase the dollar almost to the exclusion of all else, and then only when wildly successful in a manner that the other 99% were not, suddenly in the twilight years want to make it tougher on others? Is that the price of penance?
Ann Coulter was saying that she would even support a specific tax expressly on Warren Buffett.
Never mind spiritual penance or IRS codes. To the best of my knowledge nothing prevents anyone from writing a check to Uncle Sam for any amount, be it small or large. He doesn’t need to claim a tax deduction if he doesn’t want to. The IRS is not going to haul him off to jail for that. Correct me if I’m wrong.
So, if Warren Buffett thinks he’s not paying enough, let him show us, in a grand gesture to end all grand gestures, just how much he is willing to pay. He can put all his money – every red cent of it – where his mouth is, and leave the rest of us in peace.
Fifty billion ought to pay for a government program or two.
Cross-posted at Fausta’s blog