Buffett urges the Congress to raise tax on 'super rich'

By added on 16/08/2011

Billionaire Warren Buffett urged the US congress to raise taxes on the nation's wealthiest individuals to help cut the US budget deficit, saying it won't inhibit investment or job growth, the Irish Independent reports.

"My friends and I have been coddled long enough by a billionaire-friendly congress," the chairman and chief executive officer of Berkshire Hathaway wrote in the 'New York Times'. "It's time for our government to get serious about shared sacrifice."

Mr Buffett's advocacy of higher taxes for the "mega-rich" may reinforce President Barack Obama's call for an end to tax breaks for corporate-jet owners. In the op-ed, the 80-year-old investor said his federal tax bill last year, or the income tax he paid and payroll taxes paid by him and on his behalf, was US$6,938,744 (€4,800,000).

"That sounds like a lot of money," Mr Buffett wrote. "But what I paid was only 17.4 per cent of my taxable income -- and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 per cent and 41 per cent and averaged 36 per cent."

A 12-member panel, formed in the August 2 law that raised the nation's debt ceiling and averted a possible default, was charged with finding US$1.5 trillion in budget savings.

Mr Buffett said that for those making more than US$1m -- there were 236,883 such households in 2009 -- he would raise rates immediately on taxable income over US$1m, including dividends and capital gains. For the 8,274 taxpayers who made US$10m or more, he said they should get an additional increase in the rate.

"While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks," Mr Buffett wrote.

He cited Internal Revenue Service data that showed that the tax burden on the US's wealthy had fallen for the past two decades.

In 1992 the top 400 American earners had aggregate taxable income of US$16.9bn and paid federal taxes of 29.2 per cent. In 2008, while the aggregate income of the highest 400 had soared to $90.9bn, the rate paid had fallen to 21.5 per cent. Buffett said the notion that high taxes discourage hiring and investment is false.

"I have worked with investors for 60 years and I have yet to see anyone - not even when capital gains rates were 39.9 per cent in 1976-77 - shy away from a sensible investment because of the tax rate on the potential gain," he said.

"People invest to make money, and potential taxes have never scared them off," he said. "And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what's happened since then: lower tax rates and far lower job creation."

The US unemployment rate has averaged 9.5 per cent in the past two years, dropping to 9.1 per cent in July from 9.2 per cent a month earlier, a government report showed on August 5.