Despite the fact that tax rates have been increased for high-earners for investment income such as capital gains and dividends, Warren Buffett declared that he expects he will still pay proportionately less than the other people who work with him. In an appearance on CNBC on March 4, he explained what he means.
Because of the end of the payroll tax holiday, which was permitted to expire during the final “fiscal cliff” negotiations, taxes have increased on all wage earners, not simply the highest-earning ones.
About his new rate under the new legislation, he said, "I'll be a fair amount higher, 8 or 9 points higher. But the differential between me and the rest of the office, not just my secretary but the rest of the office, was greater than that. It'll be closer, but I'll probably be the lowest paying taxpayer in the office."
Buffett has long been a proponent of a fairer tax system, and his proposal is called The Buffett Rule. Simply, it states that a minimum tax should be imposed on people with very high incomes, especially those whose money derives mostly from investment income. These top earners should not be permitted to pay less, proportionately, than lower-income people whose income chiefly derives from wages.
The Obama administration is in favor of implementing something similar to The Buffett rule, in order to level the playing field and make sure that high-income households pay their “fair share” of taxes. The Obama proposal is known as the “millionaire tax.”
Republicans, however, are completely opposed to such legislation, claiming that it will hinder new investment, something that the shaky economy desperately needs.
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