Buffett said he makes $46 million a year in income and is only taxed at a 17.7 percent rate on his federal income taxes. By contrast, those who work for him, and make considerably less, pay on average about 32.9 percent in taxes - with the highest rate being 39.7 percent.
2007-06-27
05:02:21
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7 answers
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asked by
jck_kerouac
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in
Business & Finance
➔ Taxes
➔ Other - Taxes
Warren Buffet, that is.
2007-06-27
05:02:57 ·
update #1
Folks, this is Buffet speaking. Sorry if I listen to him and not you on financial topics. Twist and turn the truth. The uber-rich pay alot in dodging taxes, not in paying them.
2007-06-27
05:22:59 ·
update #2
Let's not forget that Mr Buffett just GAVE AWAY about $30 billion to the Bill and Melinda Gates Foundation, doubling the size of the foundation.
The B&MGF is the largest transparently operated charitable foundation in the world. Its primary aims are, globally, to enhance healthcare and reduce extreme poverty, and, in the United States, to expand educational opportunities and access to information technology.
Be careful about how you throw rocks. Mr Buffett and the Gateses certainly do know their way around the tax code and have amassed unimaginable wealth. BUT they have also done incalculable GOOD with the wealth that they have amassed with their substantial donations to worthy charities.
Mr Buffett's annual salary is only $100,000.00 by the way. The majority of his income comes from capital gains generally taxed at 15%. If anything, his net tax rate is a bit HIGH for someone in his situation.
Lastly, nobody pays a 39.7% Federal tax rate. The Income Tax is graduated with the highest rate at 35%. Therefore the highest net Federal tax rate is less than 35%. (The first $349,700 in taxable income for a married couple only attracts an overall tax rate of just over 28%. It's only the income above that that is taxed at 35%.)
2007-06-27 14:31:20
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answer #1
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answered by Bostonian In MO 7
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If Mr. Buffet is reporting all of his income, then there shouldn't be any arguments.
He is simply paying what the law allows for. In no way is that considered illegal (dodging).
Laws are created by Congress, the Congress is elected by the people. Do I need to explain more or do you get the picture?
There is no law in existence where everyone finds it 100% fair. Someone always thinks the 'man' is cheating him. Most of that is senseless ranting.
I assure you that Mr. Buffet is paying the appropriate tax according to his brackets and income type. Based on the information you noted, it would be very fair to assume that he has significant capital gains which are taxed at a lower rate than ordinary income. There is nothing illegal about it and the same thing is offered to the highest earning tax payer to the lowest.
You are also missing the interpretation of the 17.7 rate. That's an effective/blended rate - his tax divided by his income.
2007-06-27 06:31:38
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answer #2
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answered by Molly 6
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Tough question I mean maybe its not really fair Warren Buffets taxes are so much lower (as you probably know he agree's with you himself) but the reason is that he holds so many long term investments and the government wants people to make long term investments - they believe its good for the economy (whether or not it is would be another debate - but they have valid reasons for this belief).
Furthermore if you raised taxes to high on the rich then the rich will do more and more things to avoid taxes (some legal, some maybe not so much so) with the untimate being that they could just leave the country and renounce their citizenship (then they might not pay any taxes anywhere if the take up citizenship in a new country with no taxes). This might really cut down on taxes collected here if lots of the rich decided to do it (happily very very few have - its a rather drastic step) possible leading to huge cuts in what the government could afford.
Generally the system isn't perfect but the solutions are not easy either. I think the government is mostly doing the best they can (except for some questionable loopholes) but they sure do need to keep at it.
2007-06-27 05:16:57
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answer #3
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answered by Slumlord 7
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You can listen to Buffet all you want and you should, he's an investing genius. However, in his interview with Ben Stein, an economics genius, he never said that someone who worked for him paid 39.7% in taxes. He did say though that he asked his employees to tally all taxes they paid, including social security and medicare. Even with those included, no one pays 39.7% of their total income in federal taxes. In fact, the 32.9% number is highly dubious because of the bracketed tax schedule. Look it up for your self. Social Security taxes are only collected on the approximately the first $90,000 at 6.25%. Medicare taxes are 1.45% of everything. For a family of four, the standard deduction is approximately $24,000 so no federal income taxes are paid on that. The next $7,500 is only taxed at 10%, the $23,000 after that is taxed at 15% and so on. I'm rounding numbers here, you can look up tax tables at the IRS website, but you get the picture. Warren Buffet pays 17.7% because the bulk of his income is in long-term capital gains which are taxed at 15%.
2007-06-28 01:05:35
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answer #4
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answered by NGC6205 7
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Buffett is a long term investor, and therefore gets a different tax treatment on longterm capital gains. Capital gains tax is really a double taxation , because the gains are made with post-tax investments. In reality his 17.7% tax is more like 50.6% because he is paying taxes twice. Yes, this is an oversimplification, because I don't know how much of his money is from longterm capital gains, but that's his investment style, so im sure it's a large percentage of his income.
The people working for him are paid a more traditional salary, and are only taxed once.
2007-06-27 05:13:18
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answer #5
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answered by PH 5
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2016-10-19 01:36:29
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answer #6
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answered by tamayo 4
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You need to compare apples to apples. Buffett is talking about his Federal taxes only, excluding state. As there is no such thing as a federal tax bracket of 39.7% you are combining all taxes paid by the employees.
Most middle class in the US pay very little tax. 90% of the fedaral tax base is received by the top 10% of earners. 98% by the top 2%. (Buffett woud be in the top 10%, not 2%)
The wealthy in America certainly carry the majority of the tax burden, and I am grateful to them for that.
2007-06-27 05:18:29
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answer #7
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answered by Landlord 7
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