WARREN BUFFETT is the billionaire CEO of Berkshire Hathaway, a friend and political supporter of Barack Obama, and a well-known advocate of higher taxes on the rich. He is also a hypocrite, whose actions belie his words.
For several years now, Buffett has been calling for significant tax hikes on extremely wealthy Americans like himself. Last week, in a New York Times column headlined "Stop Coddling the Super-Rich," Buffett lamented that the $6,938,744 he forked over in federal income and payroll taxes in 2010 amounted to just 17.4 percent of his taxable income. "What I paid," the world's most famous investor observed, "was . . . actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent, and averaged 36 percent."
Buffett has not made his employees' tax returns public, but the federal tax burdens he ascribes to them appear to be highly atypical. According to the Congressional Budget Office, the overall federal tax load shouldered by Americans -- comprising income, payroll, corporate, and excise taxes -- is quite progressive. CBO reported last summer that "households in the bottom fifth of the income distribution paid 4.0 percent of their income in federal taxes, the middle quintile paid 14.3 percent, and the highest quintile paid 25.1 percent. Average rates continued to rise within the top quintile: The top 1 percent faced an average rate of 29.5 percent." If Buffett's numbers are right, his employees must be among the highest-taxed workers in America.
Yet Buffett doesn't argue that his workers' federal taxes should be cut. He demands that his own be raised.