Live

Watch CBSN Live

Warren Buffett: Wealthy are "undertaxed" compared with rest of U.S.

Billionaire investor Warren Buffett said America's richest people "are definitely undertaxed relative to the general population."

In an interview with CNBC, Buffett added that he views the problem as a "rich get richer" phenomenon, meaning the top income earners are accruing wealth at a far faster pace than the rest of the population, creating a snowball effect. 

"As we get more specialized, the rich will get richer," he said. "The question is: How do you take care of a guy who is a wonderful citizen whose father died in Normandy and just doesn't have market skills? I think the income tax credit is the best way to address that."

Buffett added: "That probably means more taxes for guys like me, and I'm fine with it."

He has long called for higher taxes on the richest Americans, but his comments come at at time when the Republicans' tax overhaul has largely delivered benefits to the wealthy and corporations through steep tax cuts. Middle-class Americans and low-income households, meanwhile, continue to struggle with stagnant incomes and rising costs. 

Family anticipating a tax refund shocked to find they owe $5,000

That's prompting new proposals from lawmakers to increase taxes on the rich, such as freshman Congresswoman Alexandria Ocasio-Cortez, who has said the top marginal tax rate on the wealthy should rise to as high as 70 percent. The idea isn't revolutionary, however: Increasing the highest marginal rates to that level would mark a return to the more progressive tax structure of the 1950s and 1960s. Under Presidents Harry S. Truman, Dwight D. Eisenhower and John F. Kennedy, for instance, the highest bracket topped 90 percent. 

No plans to retire

Separately, Warren Buffett also told CNBC that two of his potential successors earned roughly $18 million each last year managing Berkshire Hathaway's dozens of operating companies. But he has no plans to retire. 

Buffett said Greg Abel and Ajit Jain have both done a great job since they joined Berkshire's board in early 2018. Jain oversees the conglomerate's insurance businesses, while Abel oversees the other business operations.

Buffett said one of the two longtime Berkshire executives will likely become CEO eventually, but the 88-year-old Buffett doesn't plan to step down.

He also said the two investment managers who Berkshire hired several years ago have done well, though their investments have trailed the S&P 500 a bit since they joined Berkshire. He did say both have outperformed his own investments.

View CBS News In