Multi-billionaire Warren Buffett makes the argument that the ultra-wealthy, such as his friends and himself, should pay higher taxes.
He makes the point that since he is ultra-rich, his actual tax rate is about one-half of those paid by ordinary working people or professionals. His conclusion is that this is obviously unfair, yet Congress keeps defending tax breaks for the rich.
He has details on this: his own entire, personal, Federal tax rate last year was much lower than that of most ordinary citizens. I quote:
“… what I paid was only 17.4 percent 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 percent to 41 percent and averaged 36 percent. …
“Last year about 80 percent of [all Federal] 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.”
[If you didn’t already know, ‘payroll taxes’ include FICA (aka Social Security), Medicare, and so on. Capital gains taxes are different, and so are ordinary income taxes. There are some very low-wage workers who end up not having to pay any ordinary income tax, but they do NOT get any refunds from their ‘payroll taxes’. Michelle Bachmann, one of the scariest Republican candidates for a long time, states that she believes that the working poor need to pay more federal income taxes, but that capital gains taxes for the wealthy should be reduced even further…]
“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.
“These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places. “