Warren Buffett and Taxes

Warren Buffett said in an interview that the government should put taxes up for the rich, he said that he is paying the lowest tax rate that he has ever paid in his life, which the world’s richest man thinks is absolutely crazy.

Buffett went onto say that he pays a lower tax rate than his secretary who makes $60,000 a year compared to Buffett’s net worth of $44 billion or more.

Although looking at the facts, Warren Buffett’s wealth is almost all resulting from Berkshire Hathaway stock. So he receives almost no zero ordinary income. Taking this into account he pays the 15 percent tax rate on capital gains plus a little more from various other income sources. Buffett admits that’s he pays a federal income tax rate of just 17.7 percent. Given the fact that a family making a little over $15,650 will be on the same rate we can see the point Warren Buffett is making.

The wealthiest people will generally have their wealth tied up in stocks which is taxed at 15 percent or even tax-free municipal bonds. So the super-rich Americans will probably pay very little in federal income tax. The people most hit by the increase in income tax will not be the super-rich people like Bill Gates, Warren Buffett and the rest of the Forbes 400 it will infact be the small struggling businessperson.

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