The "Why" Of Buffett's Tax Proposal
The "Oracle of Omaha" has proposed income tax alternatives which HE thinks the negotiators should consider. Mr Buffett is being a bit disingenuous in his proposal.... he speaks of income taxes while HIS annual compensation falls under the 'dividends and interest' portion of the IRS Tax Code.
The aforementioned 'alternatives:'
Warren Buffett is suggesting in his proposal for higher taxes on the wealthiest of Americans-a minimum rate of 30% (those earning $1M+) and 35% (those earning $10M+).
The Buffett 'suggestion' continues with a $500,000 defined threshold of 'rich millionaires and billionaires' rather than the "Clown Prince's" $250,000; saying that
"....in some parts of the country, $250,000 barely convers a middle-class lifestyle."
[Here's where Warren Buffett misses "Clown Prince" obama's point. The "Clown Prince" has no inclination what-so-ever in allowing the average citizen to ever advance in 'class.']
Let's see how Mr Buffett's obfuscations affect his hypothetical 'income' taxes vs his actual taxes.
It's a given that Mr Buffett's current annual compensation is $100,000.
It's a given that Mr Buffett's current annual compensation is completely derived from dividends his portion of Berkshire-Hathaway generates.
If Mr Buffett's $100,000 compensation were actually subject to income taxes, after allowable deductions his rate would be 39.12995%!! Because his compensation is entirely derived from dividends Mr Buffett is taxed essentially at 15%. There are several different reasons for and levels of, the unearned income (dividends and interest-capital gains) tax rates. This is why Mr Buffett--during the most recent tax year--paid a 17.7% rate.
One fact all the socio-fascists are ignoring:
Higher taxes do not equal higher revenue (here and here)!