With all the current talk of getting the “rich to pay their fair share” or about the idea of “shared sacrifice”, you are bound to hear people on TV or in the news refer to a statement made by Warren Buffet in the above video, which is widely mis-quoted. For example, an anonymous poster (under the pseudonym “whatever”) over at the ABC News Political Punch blog posted the following comment:
“When a multi-millionaire pays less taxes than his secretary, something is wrong with the system.”
Presumably this writer is referring to Warren Buffet, one of the richest men in the world, and I’m sure this person believes that’s true – but it’s not, let me explain.
- Warren Buffet is a billionaire, not a multi-millionaire
- He pays a lower tax RATE than his secretary, not lower taxes.
Let’s remember, as the head of Berkshire Hathaway he could restructure his compensation so that his tax rate is similar to that of his employees.
Let’s review some simple facts:
- Buffett makes more than his secretary/employees
- Buffett & his employees follow the same tax code
- Buffett pays a lower percentage than his employees
- Buffett’s compensation must be classified differently than his employees
- Buffett, as CEO of Berkshire Hathaway could restructure his compensation to be like his employees, then he would have a higher tax rate, more in line with his office mates.
- Buffett has not (to the best of my knowledge) restructured his pay – yet.
In summary, I think it’s wrong to say (as many do, including Mr. or Ms. Whatever) that Warren Buffet is hoping to pay more taxes, he feels the tax system doesn’t make sense. In fact, he wants a progressive consumption tax, a form of taxation widely-held to favor the wealthy who “consume” a much smaller portion of their income in a given year.
ABCNews Political Punch Blog: With Social Security On the Table, Obama Draws Progressives’ Ire
The Economist: All hail the progressive consumption tax!