Billionaire investor Warren Buffett frequently argues that the rich aren’t paying their fair share of taxes – an argument frequently repeated by President Barack Obama.
Buffett set out to prove his point this week in a letter to Rep. Tim Huelskamp (R-Kansas)obtained by CNN.
In it, the chairman of Berkshire Hathaway discloses he paid only $15,300 in payroll taxes last year and less than $7 million to Uncle Sam on taxable income of $39,814,784, CNN reports. Buffett’s adjusted gross income was $62,855,038 last year.
A big chunk of Buffett’s income came from investments, which are taxed at a lower rate than wages, and not from wages, which accounts for the small amount of payroll taxes.
To put Buffett’s 17.4 percent federal tax rate in perspective, the non-partisan Tax Policy Center notes wage earners making between $34,000 and $60,000 have a 12 percent tax rate, including payroll and income taxes, while those earning $211,000 to $533,000 have a 20.4 percent rate,The Wall Street Journal reports.
“People who make money with money are getting taxed at a far lower rate than people who make money by their own labor,” the billionaire told CNN.
By the way, our columnist Kyle Wingfield notes that Salon.com asked Buffett’s well-heeled peers on the “Forbes 400″ list if they’d be willing to pay more taxes and eight of them, including Buffett, said sure.