Tax Foundation Once Again Refutes Warren Buffett’s Tax Misconceptions
December 13, 2007
We have written about Warren Buffett’s misconceptions on taxes here, here, and here, and, once again, we need to inject some truth and perspective into his recent public statements on the income tax. Buffett made a joint appearance with Hillary Clinton earlier this week and argued for increased progressivity in the tax code. From the Associated Press:
Clinton played moderator and questioned Buffett—one of the world’s richest people with a net worth of $52 billion, according to Forbes magazine—about the economy. Buffett is chairman and CEO of Omaha, Neb.-based Berkshire Hathaway Inc., an investment company he founded.
Buffett and Clinton warned of the dangers of a growing gap between rich and poor, and a tax system that disproportionately helps people Buffett called “these super-rich”—himself included. Both said political and economic instability could result.
“In the last seven-eight years what has happened is that the super-rich have gotten a huge break,” Buffett said.
Tax Foundation President Scott Hodge responded to Buffett’s latest claims with a new Tax Foundation Fiscal Fact that sheds some light on how much tax the wealthy actually pay:
A new report by the Congressional Budget Office shows that Buffett and Clinton have their facts quite wrong. Indeed, the “super-rich,” the top 1 percent of households, are now paying a record 27.6 percent of federal taxes (those taxes measured by CBO) and a record 38.8 percent of income taxes. By contrast, the bottom 80 percent of households—representing 90 million households—pay 31.1 percent of federal taxes and just 13.7 percent of income taxes.
In other words, the top 1.1 million American households pay a greater share of the income tax burden than the bottom 90 million combined. Indeed, as the chart below shows, it may not be long until the wealthiest households will be shouldering a larger share of all federal taxes than the bottom 90 million.
Source: Congressional Budget Office