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Warren Buffett says 'mega-rich' should pay more taxes

August 15, 2011 12:00:00 AM PDT
Investor Warren Buffett, one of America's richest men, said he and his wealthy friends should have to pay more to the government.

In a New York Times opinion piece, Buffett said he would immediately raise rates on households with taxable income of more than $1 million, and he would add an additional increase for those making $10 million or more.

"My friends and I have been coddled long enough by a billionaire-friendly Congress," Buffett wrote. "It's time for our government to get serious about shared sacrifice."

Buffett also recommended that Congress' new debt-reduction supercommittee leave rates for 99.7 percent of taxpayers unchanged.

Buffett noted that the mega-rich pay practically nothing in payroll taxes, while the middle class is hit with heavy payroll taxes.

Last year, Buffett paid $7 million in taxes. That sounds like a lot of money, but it works out to a tax rate of just 17 percent. Buffett points out that, on average, his employees pay about double that rate - 33 percent.

He said Washington legislators "feel compelled to protect us, much as if we were spotted owls or some other endangered species."

Buffett said he knows many of the mega-rich well, and most wouldn't mind paying more in taxes, especially when so many fellow citizens are suffering. He also said he has yet to see anyone shy away from investments because of tax rates on potential gains, even when rates were much higher in the mid-1970s, 1980s and 1990s.

"People invest to make money, and potential taxes have never scared them off," he said.

It didn't take long for President Barack Obama to embrace Buffett's call to tax to the rich.

But critics like conservative Pat Buchanan were just as quick to dismiss it.

"Why doesn't he set an example and send a check for $5 billion to the federal government? He's got about $40 billion," Buchanan said.

Buffett, like other wealthy Americans, gets tax breaks on capital gains - the profits resulting from investments - and they're taxed at only 15 percent.

According to Obama, wealthy Americans are those who make $200,000 a year or more. Buffett wants to raise taxes on those making $1 million or more. An additional 1-percent tax on the richest Americans is estimated to raise $100 billion in revenues over 10 years, which some tax experts said is not enough.

"The bottom line is that the fiscal hole that we face is so large that everybody is going to have to be prepared to pay more in revenues in the end," said Maya MacGuineas of the Committee for a Responsible Federal Budget.

The Associated Press contributed to this report.

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