Aug. 15. 2011, 2011 -- Warren Buffett, one of the richest men in the country, wants to pay more taxes and thinks his super-rich friends should too.
Buffett, who is estimated to be worth more than $47 billion, called on Congress to commit to "shared sacrifice" and raise taxes on people earning more than $1 million. Buffett said the rich are "coddled" by Congress "as if we were spotted owls or some other endangered species."
"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 a Sunday New York Times Op-ed.
President Obama cited Buffett's op-ed today during his remarks at the first stop on his presidential Midwest bus tour. The president said Buffett's call for taxing the wealthy shows that his "balanced" approach to deficit reduction is the best option.
Obama said Buffett enjoyed a lower tax rate because the majority of his income comes from capital gains, which are taxed at a lower rate.
"You don't get those tax breaks," Obama said to the Cannon Falls, Minn. audience. "You're paying more than that and I think you're a little less wealthy than he is."
Over the next three months 12 members of Congress will decide how to fix the country's fiscal crisis and cut at least $1.5 trillion from the 10-year budget deficit. Half of those committee members are from the Republican Party, which has vowed not to raise taxes.
Buffett, who has spoken out in favor of raising taxes on the rich multiple times, urged the super-committee to increase income taxes for the 236,000 people who earned more than $1 million in 2009, including taxes on investment profits such as capital gains and dividends. For the 8,000 people who made more than $10 million in 2009, Buffett suggested an even higher tax increase.
The billionaire said he paid about $7 million in payroll and income taxes last year. That is about 17.4 percent of his taxable income, a lower proportion than any of the other 20 people in his office whose tax burdens range from 33 percent to 41 percent, he said.
"My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government to get serious about shared sacrifice," Buffett wrote.
In the July 23 Republican weekly remarks debt super-committee member Rep. Jeb Hensarling, R-Texas., said higher taxes could "destroy even more jobs."
But Buffett disagrees. The third-richest man in America said he has yet to meet a wealthy investor who would pass up a good investment because of the tax rate on potential gains.
"People invest to make money, and potential taxes have never scared them off," Buffett wrote in his op-ed.
Nevertheless, every GOP presidential candidate has spoken out against raising any taxes.
Republican presidential candidate Michele Bachmann told the Wall Street Journal's Stephen Moore in June that if elected she would abolish the capital gains tax, which Buffett said should be increased, and amend the tax code so every American pays income tax.
By eliminating the capital gains tax, which is currently 15 percent, the Tax Policy Center estimates that about 23,000 millionaires would no longer have to pay income tax because their only income comes from capital gains. This move would add $11 billion to the federal deficit, according to Forbes.
The three former or current governors who are running for president—Mitt Romney of Massachusetts, Jon Huntsman of Utah and Rick Perry of Texas—did not alter the tax rate for high-income earners while in the governor's mansion.
At the Iowa State Fair Thursday, Mitt Romney reiterated his policy of not raising taxes. He got into a heated exchange over the issue after an audience member demanded to know how Romney was going to preserve Social Security, Medicare and Medicaid.
"I'm not going to raise taxes. That's my answer," Romney said. "And if you want somebody who is going to raise taxes you can vote for Barack Obama."
Throughout his time as governor, Romney oversaw a slight decrease in income tax, from 5.6 percent when he took office in 2003 to 5.3 percent by the time he left in 2007.
Massachusetts residents have historically had a one of the highest tax burdens in the country, consistently ranking in the top 10 states, said Joseph Henchman, the vice president of state projects for the Tax Foundation. When Romney was in office the state dropped out of the top 10, falling from having the eighth-highest tax burden in 2005 to the 13th highest in 2006.
Rick Perry, who announced Saturday that his is running for president, is the longest-serving governor of a state that levies no personal income tax.
At a fundraiser for Missouri Republican Gubernatorial candidate Peter Kinder in June, Perry said all states should mirror Texas and abolish personal income taxes.
"There is a reason that Missouri is not as competitive as it should be. Want me to tell you what it is? It's called an income tax. A personal income tax. You've got one and we don't! You get rid of your personal income tax and then you can come compete with us," Perry said.
Former Utah Governor Jon Huntsman revamped the entire state tax code when he was in office from 2005 to 2009. He swapped a more complex six-bracket tax system for a flat 5 percent income tax.