Tags: Buffett | Tax | Plan | Middle | Class

WSJ: Buffett’s Tax Plan Will Hurt Middle Class

Wednesday, 17 Aug 2011 10:46 AM

Billionaire investor Warren Buffett's calls for greater taxes on America's super wealthy could ultimately hurt the middle class, The Wall Street Journal reports.

Buffett says he pays 17.4 percent of his income in taxes, a figure he says is unfair considering salaried workers often pay more.

But as The Wall Street Journal points out, Buffett makes most of his income from his investments, in particular from dividends and capital gains that are taxed at a rate of 15 percent.

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Warren Buffett
(Getty Images photo)
"What he doesn't say is that much of his income was already taxed once as corporate income, which is assessed at a 35 percent rate (less deductions). The 15 percent levy on capital gains and dividends to individuals is thus a double tax that takes the overall tax rate on that corporate income closer to 45 percent," the newspaper reports.

Hiking taxes, especially on corporate income and on couples earning $250,000 and above favored by President Barack Obama, would make the country less attractive from an investor's point of view and ultimately, hurt the middle class, including those who benefit from corporate tax breaks and aren't worth billions of dollars.

"Mr. Buffett says it's only 'fair' to raise his taxes, but he's lending his credibility to raising taxes on millions of middle-class earners for whom a few extra thousand dollars in after-tax income is a big deal. Unlike Mr. Buffett, those middle-class earners aren't rich and may earn $250,000 for only a few years of their working lives. How is that fair?"

Critics says Buffett should cut a check to the IRS voluntarily.

"For tax raising advocates like Warren Buffett, I am sure Treasury would take a voluntary payment for deficit reduction," Sen. John Cornyn, R-Texas, writes in a tweet, according to Tribune Newspapers.

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Billionaire investor Warren Buffett's calls for greater taxes on America's super wealthy could ultimately hurt the middle class, The Wall Street Journal reports. Buffett says he pays 17.4 percent of his income in taxes, a figure he says is unfair considering salaried...
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2011-46-17
Wednesday, 17 Aug 2011 10:46 AM
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