Wednesday October 31, 2007
Guardian
The United States' second-richest man has delivered a blunt message to the Bush administration: he wants to pay more tax.Warren Buffett, the famous investor known as the "Sage of Omaha", has complained that he pays a lower rate of tax than any of his staff - including his receptionist. Mr Buffett, who is worth an estimated $52bn (£25bn), said: "The taxation system has tilted towards the rich and away from the middle class in the last 10 years. It's dramatic; I don't think it's appreciated and I think it should be addressed."
During an interview with NBC television, Mr Buffett brandished an informal survey of 15 of his 18 office staff at his Berkshire Hathaway empire. The billionaire said he was paying 17.7% payroll and income tax, compared with an average in the office of 32.9%.
"There wasn't anyone in the office, from the receptionist up, who paid as low a tax rate and I have no tax planning; I don't have an accountant or use tax shelters. I just follow what the US Congress tells me to do," he said.
Mr Buffett also took a pot shot at hedge fund managers. He said: "Hedge fund operators have spent a record amount lobbying in the last few months - they give money to the political campaigns. Who represents the cleaning lady?"
His intervention comes amid an increasingly rancorous debate on Capitol Hill about tax. Shortly after taking office, President Bush pushed through $2 trillion in temporary tax cuts, including sharp reductions for high-earners. These expire at the end of 2010 and the White House wants to renew them.
A leading Democrat, the Harlem congressman Charlie Rangel, published alternative plans this week that would impose a 4% surcharge on people earning more than $200,000 a year, while delivering tax relief to 90 million working families.
Republicans say the net effect would be a $2 trillion tax increase that would hurt small businesses and farmers. Meanwhile, Mr Buffett's remarks drew a robust response from the US Chamber of Commerce, which said the top 1% of US earners accounted for 39% of tax revenue - and the highest earning 25% of the population delivered 86% of the tax-take.
The chamber's chief economist, Martin Regalia, said: "Mr Buffett has made an awful lot of money and if he wants to pay more taxes, I think that's fine. But I think he should get his facts straight."
He added: "There's no question in my mind: if you were to impose [the Democrats'] tax increases, you would see the US go into a recession."
37 Kommentare:
Interesting standpoint taken by a credible financial stalwart.
I for one, would not want to pay more taxes.
I would if I know that my taxes go where it should, namely, for the common good. The amenities of modern society do not come cheap, you know.
Ah yes, but you know under what government I am being ruled under. In my country, "The Common Good" refers to politicians and their select few sycophants. : )
It's OUR country, Janjan!
i don't know taxes well and i don't know him much but he's turning me into a fan - first giving away his fortune to philanthropy, and now wanting to pay more taxes after seeing his receptionist pays a higher percentage than he does.
ipamigay na lang kaya nya pera nya sa pinas no?! in the proper hands of course, if there's such a thing. heh.
warren buffet is different man. despite all his wealth, he lives simply. when i was in omaha late 2005, a friend from the place told me: "do you know that warren buffet and me are neighbors?"
"wow," i said. "you must be really, really rich."
"Of course not," he said. "anyway, lets drive to our place and you'll see."
and we did. upon arriving, he said" that's my house; its modest." and he counted two or three houses away, and told me: "that's warren buffet's house."
Indeed, buffet's house is really just like any other middle class house in omaha. i was expecting to see a mansion.
Har! I sit corrected. :)
he's one of a kind, dave, I agree. He's fabulously rich but he also knows how to give back to society. People like him and George Soros-- and now Bill Gates-- are beginning to ask themselves what are all these riches for?
well, he's second biggest donor of the B&M Gates Foundation and when I was in Bohol last August I met a Finnish doctor who is testing a vaccine on pneumonia there paid for by the Gates Foundation. So, indeed, we're one of the beneficiaries of his largess.
In our own homefront, we have John Gokongwei, who I believe pledged something like half his net worth for charity. The biggest beneficiary is my school, the University of San Carlos.
interesting! i knew buffet gave his money to bill gates but in my 5 or so years of NGO work it was always a small, fun joke of a challenge to meet a beneficiary of the gates foundation in the philippines. but then again, i move in the environment and volunteerism circles and they're partial to health causes right?
so, the challenge ends then. haha. thanks for the info. i'm enjoying backtracking through your blogs. and i saw you mention cagayan de oro related to your family vacation. taga-didto ba mo? i'm from cdo, pero sa davao nagtrabaho before coming here.
the question right now is: why is it that only in the US this trend is happening? In that country, there are so many NGOs (they call it non-profit organizations or NPO) doing all sorts of good things from preservation and conservation of the environment to educational programs for the youth, etc without the usual hoohaa from the press. the money comes from private citizens who think they have enough and blessed enough to give. bill gates, buffet, soros (well, this guy im not really sure about), etc are only among the many, many monied people giving away their wealth for the public good.
and why? i guess its the tax regime in that country. when tax rates are low, you could accummulate so much wealth that you could throw away for some socially beneficial projects.
america is essentially unequal compared to europe but it has full of people who are giving away money for any good socially beneficial project.
im not saying though whether or not europe or america is better.
I grew up in the wilderness of Bukidnon. My father's family come from Cebu and my mom's from Misamis Oriental. But my wife and I lived and worked long in Davao where we set up Tambayan (Center for Children's Rights)- a drop-in center, among others, for girls in street gangs. Have you heard of it when you were there?
this is an interesting theory, dave. But I think there is really no evidence to prove it. Actually, Buffet complains about the injustice in the US tax regime where the very rich like him pays much lower tax rates than his secretaries. The sad thing is Europe is going to that direction to.
Though not of B&M Gates Foundation, we are the main grantee of the Partners-in-Learning Program of Microsoft Philippines. This program is aimed to enhance the teaching competence of public school teachers by using IT in their teaching media. This btw, is a nationwide program, reaching far-flung villages in the country. This is one good stroke of Microsoft, as they have used their core business as their expression of CSR. By doing this, companies like Mircosoft have tipped their triple bottom line to a balance. guess that's what makes companies relevant in nation-building.
Oy, Carolinian diay ka, Jan? four of my siblings graduated there, too!
I don't think the tax regime alone is the main factor for the number of philanthropists in the US. A lot of it could also be attributed to its culture, as well as the pro-cause mentality of the Democrat party.
You may have a point though. In the Philippines, donations made to most persons or entities are only tax-deductible to the extent of 10% of net income, unless the donations made were given to duly-accredited NGO's or to the Philippine government (in which case the donation is fully deductible). Fortunately, the government is coming up with more tax-incentives to encourage CSR and philanthrophy. Proof is the recently passed Adopt-A-School law which grants 150% tax deductibility for donations/investments made in duly-accredited public school programs.
well, there are actually studies to that effect. it was published/ featured in The Economist about a year ago. America generally has lower tax rate although Bush the Son (of the bitch) mangled is tax system even more.
in Europe its a bit different because higher tax rates suggests that the State, supposedly, has enough resources for social welfare, thus its preference for the social welfare model of political economy.
Yup. From Kindergarten until Law School. I also taught at the College of Commerce. : ) If you cut my arms, I would bleed green and gold.
Oppps, the wifey has just announced lunch. I'll get back to you Dave, Tatit, Danny, and Janjan, later, okey?
oh, enjoy the lunch. pls extend my regards to ruth and the kids.
the super rich in our country should emulate warren buffet, they should ackowledge that they are taxed less than the middle class, and they should lobby for higher taxes, not evade from paying taxes.
I did beat Warren Buffet last year. The IRS required me to pay just 6.1%. :)
But in general, one major reason why the lower tax rate (him or me) is we both are categorized as having a business. The tax system is tilted towards the businesses (not towards the rich).
Giving away money to charities, if done correctly, will tend to give the donor more net money at the end of the year after tax returns. The donated money tends to pull down the tax rate because of deductibility rules.
Warren Buffet is a financial genius. He knows what he is doing.
It is not because he is very rich that he got lower tax rate. It is because he has businesses and these can claim higher deductibilities. It just happens that rich or very rich people have businesses (not surprisingly).
Agree, when i see infratructures built every now and then for the sake of the people, when i see that the mentally handicapped, the orphans, the elderlies are provided , and taken cared well by the institutions, when i see peace and order and effective rule of law- then
i see my taxes contribute to the well being of the society i am in-
and i am glad- ^__^
What do you mean by this, Janjan? Can you give me an internet link to this new law?
oh yeah, but sad to say this is wishful thinking, Greg.
Now, that you mentioned it, I can recall now that I came across such a study but I don't know if it was the same one you refer to. The one I read was a very biased one in favour of the Americans. I remember it criticizing the Europeans for having no "culture of philantrophy" like in- where else?- the United States which was odd because Europeans like the Dutch and other Scandinavian countries are the world's top donors per capita for different development causes around the world. And the Germans themselves are not that stingy when it comes to humanitarian aid. When Tsunami struck Asia for example, Germany contributed even more help to the victim countries than the much bigger and richer United States. But you're right continental Europe and the US have generally two different social models. The Europeans are from Venus and the Americans from Mars, as one book title says.
amen to this, Linsi!
So there you go, Bong :-)
ah, if you continue doing that in time, in time, you'll be as rich as he is, Bong! LOL
I've heard about this Microsoft project long time ago, Danny, was it the one initiated by the convicted and now pardoned President Estrada?
It's not that new actually... the law was passed on 1998 but only gained steam in the present day when CSR has become a popular corporate mantra.
Here's a news report covering it:
http://www.manilatimes.net/national/2007/mar/04/yehey/metro/20070304met4.html
Here's the official government publication on it:
http://www.gov.ph/forum/thread.asp?rootID=78217&catID=5
salamat, danke schon, Janjan! We'll check your links now!
LOL. That's not possible. He started doing business at the age of 11. What was I doing when I was 11? Ahh... I was playing "tumba lata". :)
the europe approach to philantrophy is through its public institutions, which is not really philantrophy because its tied to european foreign policy.
the american model is through private philantrophy. its not comparable. which one produces results? i dont know.
in terms of actual amount these days, it seems like private philantrophy (gates, buffet) is bigger lately. that's my impression anyway. re tsunami, aid if you value the actual rescue efforts using sophisticated logistical system of the US military, i guess the US contribution is much bigger than europe.
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