Brokaw and Buffett: The Rich Don't Pay Enough
It’s an attention-getting statement: multibillionaire Warren Buffett doesn’t think the rich pay enough in taxes.
“[B]uffett sees a fundamental injustice that he says touches all Americans,” Tom Brokaw said on the October 29 “NBC Nightly News.”
That might seem bizarre coming from the third-richest man in the world, but the Berkshire Hathaway CEO has been a proponent for some time now of a change in the tax system that would likely work against him.
“The taxation system has tilted toward the rich and away from the middle class in the last 10 years,” Buffett said. “It’s dramatic and I don’t think it’s appreciated. And I think it should be addressed.”
And once again, Buffett used his employees to illustrate how unfair he thinks the tax code is. Back in June, Buffett cried foul when he said his secretary paid a higher percentage in taxes than he did.
“The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter,” he said at a Hillary Clinton fundraiser, according to the June 28 Times of London. “If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”
This time Buffett incorporated more members of his staff.
“[I]n our office, 15 people cooperated in a survey out of 18,” Buffett said. “I didn’t make anybody do it. And my total taxes paid – payroll taxes plus incomes taxes – mine came to 17.7 percent. The average for the office was 32.9 percent. There wasn’t anybody in the office, from the receptionist on up that paid as low a tax rate and I have no tax planning, I don’t have an accountant, I don’t have tax shelters. I just follow what the U.S. Congress tells me to do.”
It is hard to imagine Warren Buffett, sitting at his home in Omaha, Neb., around 10 p.m. on April 15, filling out tax forms and making a run to the post office before midnight.
But in reality, American taxpayers don’t fall into the “99 percent” versus “1 percent” of humanity. According to a March 30, 2006, Tax Foundation report, fewer than six in 10 Americans pay any income tax at all.
"During 2006, Tax Foundation economists estimate that roughly 43.4 million tax returns, representing 91 million individuals, will face a zero or negative tax liability. That's out of a total of 136 million federal tax returns that will be filed,” Scott Hodge recounted in the report. “Adding to this figure the 15 million households and individuals who file no tax return at all, roughly 121 million Americans – or 41 percent of the U.S. population – will be completely outside the federal income tax system in 2006. This total includes those who pay no tax, and those who pay some tax upfront and are later refunded the full amount of the tax paid or more ...”
"The number of tax returns with zero or negative tax liability has risen steadily over the past decade,” the report continued. “However, it accelerated sharply between 2000 and 2004 due to the effects of tax changes during President Bush's first term of office."
Brokaw’s report ignored that and the range of those who actually do pay taxes in the United States. According to the National Taxpayers Union, the richest 1 percent (those earning above $364,657 annually) pay 39.38 percent of all federal personal income taxes. The richest 5 percent (those earning at least $145,283 annually) pay 59.67 percent of all federal personal income taxes.
Also, the type of tax reform Buffett favored was downplayed while Brokaw put more emphasis on the class-warfare notion that the rich don’t pay enough in taxes.
“Buffett doesn’t hold out much hope that Congress will pass his favorite idea – a progressive consumption tax,” Brokaw said. “But, that does not mean he is going to stop speaking out. After all, his employees now are counting on it.”
And so is the Democratic Party and any other candidates who want to raise taxes, because Buffett offers plenty of sound bites when it comes to the rich not paying enough.