Buffett to Congress: The wealthy are under-taxed

Warren Buffett returned to Capitol Hill recently to meet with Democratic Congressional leaders and urge them to raise taxes on the wealthy.

Senator Claire McCaskill (D-Mo.) was impressed.  “It was interesting to see someone who is such an aggressive capitalist, who believes so much in our capitalist system, saying we’ve got the scales way too heavily toward people who are very, very wealthy.”

Buffett repeated a point he made in October 2007 to Tom Brokaw on NBC News, that his effective tax rate is significantly less than his lower paid co-workers.

Buffett disclosed that he paid a 16.5 percent tax rate on all his income in 2008 because the tax rate on capital gains and dividends is 15 percent.  Meanwhile, a Berkshire Hathaway employee earning between $33,000 and $83,000 must pay a 25 percent federal income tax rate.

Wealth for the Common Good is researching a campaign for 2010 to eliminate the tax preference for capital gains and dividend income. Our proposal would be to tax all forms of income the same.  We’d love your perspective on this.  Should income from capital gains be treated differently?  If so, why?

Feel free to post your thoughts here, in our comments section. Or email Alison@wealthforcommongood.org.