Any discussion of tax reform is sure to be a heated exchange, and it was no different earlier this week at a fundraiser event when renowned billionaire investor and Berkshire Hathaway Chairman Warren Buffett suggested to presidential hopeful Sen. Hillary Rodham Clinton the idea of ramping up the tax code on big businesses and the super rich.
Buffett reportedly discussed a variety of issues in a question and answer session with Sen. Clinton, including his disdain for private equity firm power brokers.
He was quoted as having said, "The people that earn their living doing that should be subject to taxes that reflect their labors.
Speaking to several hundred supporters of the U.S. Democratic senator from New York, Buffett reportedly revealed his puzzlement that he was taxed at a lower rate than many of the lesser-paid individuals working for his company.
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Buffett said he earned $46 million a year in income and is only taxed at a 17.7 percent rate on his federal income taxes. In comparison, he said, his employees who may considerably less, pay on average about 32.9 percent in taxes — the highest rate is 39.7 percent.
Private equity firms have recently become targets of Congress who claim that fund managers benefit from unfair tax advantages.
To drive home his point, Buffett offered $1 million to any member of the audience who could show that one of the nation’s wealthiest individuals pays a higher tax rate than one of their subordinates.
Switching subjects, Buffett told attendees he remained relatively positive about the U.S. economy overall and remained doubtful that the recent problems in the subprime mortgage market would spread to the rest of the housing sector and the larger economy.
"Overall, if the unemployment rate doesn’t increase and interest rates don’t increase, then I don’t think it will have an effect on the rest of the economy,” Buffett stated.
Editor's note:
Buffett, Soros, Templeton, Rogers: Learn Their Money-Making Secrets
The 3 Best Income Stocks in the World
Buffett: The best book ever written on investing.
