Billionaire investment tycoon Warren Buffett, who has become the unwitting mascot of President Obama’s deficit reduction plan, is less than thrilled with one of the plan’s main provisions: the millionaires’ tax, or as it’s come to be known, the ”Buffett Rule.”
In an interview with Bloomberg Television today, Buffett said he did not support the president’s plan to increase taxes on people who earn more than $1 million per year.
“It isn’t [my idea] to have the rich pay more taxes. It’s to have the ultra-rich pay more,” he said, according to The Hill. “What I’m talking about would probably apply to 50,000 people in the country.”
Later on CNBC Buffett said if it were up to him, people earning $50 million would not see any tax increases, only people who “make a lot of money and pay a very low tax rate, like me.” Buffett did not put on a number on what he considers a “very high income.”
The Buffett Rule, as President Obama has taken to calling it, is part of the plan Obama submitted to the super-committee for deficit reduction. The rule would increase the tax rate for millionaires to ensure that high income earners do not pay a lower tax rate than middle- or low-income earners. Obama dubbed this provision the Buffett Rule after the billionaire investor said there should be “shared sacrifice” in reducing the deficit.
In a New York Times op-ed last August, Buffett complained that he and his “mega-rich” friends have been “coddled” by a “billionaire-friendly Congress” because he pays a lower tax rate than his secretary.
“While the poor and middle-class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks,” Buffett wrote in the op-ed.
The day after Buffett’s piece ran in the Sunday paper, Obama cited it as proof that a “balanced” approach was necessary in deficit reduction. Less than a month later, Obama introduced hisplan deficit reduction plan which included the so-called Buffett Rule.
Buffett said today he has not “looked at all the details” of the president’s plan, but said “there is no question there will be parts I disagree with.”
As ABC News’ Jake Tapper reported, the president has not laid out the specifics on what the income cut-off or the higher tax rate would be under the Buffett Rule, but officials said it would affect fewer than 450,000 taxpayers, or 0.3 percent. In a press release announcing his plan, the White House said that “people making more than $1 million a year should not pay a smaller share of their income in taxes than middle-class families pay.”
According to IRS reports, there were about 237,000 millionaires, or about 0.1 percent of all filers, that filed income tax returns in 2009, the most recent year for which data is available. There were about 8,000 filers who reported gross incomes of more than $10 million, the largest income group reported in the IRS documents.
Thus, under Obama’s proposed Buffet Rule, which seems to include all millionaires, about a quarter of a million millionaires would pay higher taxes. Under Buffett’s version of the rule, which he said today would not include people earning $50 million, significantly less than 8,000 people would be impacted.
White House Spokesman Jay Carney pushed back against reports that Buffett spoke out against the president’s proposed “Buffett Rule” today, saying there has been “deliberate misrepresentation for political reasons” and that what Buffett said “absolutely fits the Buffett rule as the president described it.”
Carney said the goal of the Buffett Rule was not to raise taxes on every millionaire because “many are paying an effective tax rate that is at least as high as middle American,” instead it was intended to target the “many others who are paying an effective tax rate that is much lower because of the nature of their income.”
Buffett said in the CNBC interview that the White House asked his permission before using his name. When asked if he is happy that he said “yes,” Buffett responded, “Sure.”