Warren Buffets $1,000,000 Tax Bet

[jeffrey]

I'll-- I'll bet-- I'll bet a million dollars against any member of the Forbes 400 who challenges-- me that the average for the Forbes 400 will be less than the average of their receptionists. So, I'm-- I'm-- I'm-- I'll give 'em an 800 number. They can call me. And the million will go to whichever charity the winner-- designates.

Warren Buffett and NBC's Tom Brokaw: The Complete Interview - Warren Buffett Watch - MSNBC.com

[Broken Arrow]

Those are some very interesting thoughts from Uncle Buffet. Thanks for sharing!

[jIM_Ohio]

I've seen this posted here and at other forums before.

20% of 20 million (4 million) is more than 30% of 1 million ($300,000).

The more money a person makes the lower percentage of income their tax will appear. I would not just compare percentages- you need to compare dollar amounts paid and percentages paid.

I get taxed at 25% marginal tax bracket. Yet my effective tax each year is close to 12 or 13%.

Buffet 17.7% is what he paid (on $66 million of income- 11.22 million in taxes paid to be specific).
office avg was 32.9% It takes $300,000 to reach this level for payroll taxes, so we are not talking about receptionists.

[sweeps]

I know what you're saying Jim, but the question is, is that fair? Is it fair that some poor schmo must pay 33 cents for every dollar he earns vs. some ultra-rich guy paying 18 cents for every dollar he earns? It's all philosophical I guess. I mean let's go further than that... consider this argument:

Everyone gets roughly the same amount of government services regardless of their income. So taxes shouldn't be based on percentage at all. Everyone pays the exact same amount of taxes. Income is irrelevant. (Of course I don't really believe this, and it wouldn't be practical anyway, but isn't this the logical next step?)

Anyway... on a complete side note... I like how the interview includes the words exactly as they were spoken. Including the stuttering, the filler words, corrections, etc. Normally written interviews are cleaned up and you don't get this extra context.

[Jaun22]

Those are some very good points.

[jIM_Ohio]

sweeps- you can listen to interview from the link provided.

Buffet also pointed out that state taxes are not the same as federal, and it's possible those rich people had to pay more in state taxes than they owed on federal.

But he also pointed out that the very rich (like Bill gates) can move to a state with no income tax (like Texas or Washington).

For someone to pay 33% federal income (as overall rate) they need to be making more than $300,000. The survey was taken in Buffet's office, and I assume most of these people (15 serveyed) were investment advisors making around $500,000 or more.

Is it fair that my taxes, which I work to pay (if I did not work, I would have no taxes, right?), contribute to a welfare system which is abused by people which choose not to work.

Loopholes or not, if my taxes feed corruption, my suggestion is to reduce the taxes I pay to reduce the corruption.

Government looks at me and most of working class as a number which gives it tax resources. I would prefer government be smaller and much more fiscally responsible.

[sweeps]

Ok, you want taxes to be lower and you want to root out corruption and deadbeats (who doesn't?), but that doesn't address the topic of how taxes are distributed which is what Buffet's point is.

This seems like deja vu... I'm sure we had this discussion before.