Billionaire investor Warren Buffett made $63 million and paid $6.9 million in taxes. Why do we know this juicy fact? Because Buffett and Representative Tim Huelskamp (R-KS) have been engaged in a war of the words and it looks like Buffett has won this round.
Here's the background: after Buffett penned the now-famous New York Times op-ed ("Stop Coddling the Super-Rich"), in which he argued that the wealthiest Americans should pay more in taxes, Huelskamp demanded that Buffett release his tax returns to prove his thesis.
Buffett was happy to oblige. In a letter to the Congressman, which he shared with CNNMoney, the Oracle of Omaha said that he would be delighted to release his returns, as long as other ultra-rich Americans would do the same. Short of that long-shot, he spelled out the numbers to make his case:
My adjusted gross income (line 37) was $62,855,038, my taxable income (line 43) was $39,814,784 and my federal income tax (line 60) was $6,923,494. In addition, my payroll taxes were $15,300.Buffett didn't do the math for Huelskamp, but based on these numbers, Buffett paid taxes totaling 17.4 percent of his $39.8 million in taxable income, a level that is far lower than the average American who pays something closer to 30-something percent. Buffett challenged Huelskamp to find out the average tax paid by his co-workers, guessing that "it's likely that a very large percentage Senators and Representatives and their staffs, will be in the 30's as well. Contrast that to the 21.4% enjoyed in 2008 by the 400 highest-income Americans whose income averaged $227 million each."
Before you write in and complain that the rich pay the lion's share of taxes, please note that we are taking about the mega-rich. As my colleague Carla Fried points out, As a share of total income and taxes paid in the U.S. in 2008, here's what the 400 wealthiest households contributed:
- 13.1 percent of all capital gains
- 4.6 percent of all dividend income
- 3.6 percent of all taxable interest
- 1.3 percent of the value of all itemized deductions
- 1.3 percent of total adjusted gross income
- 0.15 percent of all salaries and wages
- 5.2 percent of all charitable deductions
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