Warren Buffett says the super-rich pay lower tax rates than others

It’s not often you see someone stand up and say, “Tax me more!”

Yet that’s just what famed investor Warren Buffett has done in an op-ed in the New York Times headlined, “Stop Coddling the Super-Rich.” Buffett says that very wealthy people like himself pay lower tax rates than the middle class, thanks to special tax categories for investment income.

Buffett said if it were up to him, people earning $50 million would not see any tax increases, only people who “make a lot of money and pay a very low tax rate, like me.” Buffett did not put on a number on what he considers a “very high income.” As an example, Buffett said he paid an effective tax rate of 17.4 percent, while people who worked in his office made much less but paid higher effective tax rates of between 33 percent and 41 percent, averaging 36 percent.

OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

“If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot,” Buffett wrote. “To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.”

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. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

President Obama’s claim that he pays a lower tax rate than a teacher making $50,000 a year isn’t true. A single taxpayer with $50,000 of income would have paid 11.9% in federal income taxes for 2010, while the Obama’s paid more than twice that rate — 25.3% (and higher rates than that in 2009 and 2008). And if the $50,000-a-year teacher were in Obama’s tax situation — supporting a spouse and two children — he or she would have paid no federal income taxes at all.

But the president went too far when he started using his own tax rate to make the argument that “millionaires and billionaires” should pay higher taxes.

So when it comes to Buffett’s statement, there are two categories: the rich and the really rich. And the evidence tends to point to the conclusion that the really rich pay less in taxes as a percentage of income then their merely well-to-do counterparts — if their income comes primarily from investments. Overall, we rate Buffett’s statement True. What’s your opinion?