Greed: Why You Pay A Higher Tax Rate Than Buffett


wow.jpg

The incomparable Mark Shields (any News Hour fans out there?) quotes Mr. Warren Buffett:

In my office, I have 18 or so people there, and I ask them to compute line 63, which is their tax, and then add payroll taxes, and compare it to line 43, which is their taxable income. And these people who make anywhere from $50,000 to $750,000 a year … and the lowest person in the office pays a higher rate than I do. I paid 17.7 percent last year, counting payroll taxes. … The [employees’] average was twice mine. [Private equity managers] say they fix up companies and they get paid for doing that. On balance, they’re paying a 15 percent tax rate on that and no payroll taxes, and somebody that fixes up the restroom is paying 15.3 percent in payroll taxes, just to start with. [The janitor who works] for peanuts pays a higher tax rate than people who fix up companies [for] hundreds of millions of dollars annually in income [emphasis added].

That’s right: on average, Warren Buffett’s employees pay twice as much of their income in taxes as he does. That means you probably pay a higher percentage of your income in taxes than the second-richest person in the world. Thank God the new Democratic Congress is ignoring the fact that the industry gave “77 percent of its $8.2 million in donations to Democratic candidates” and cracking down on unfairly regressive taxation anyway. Oh, wait:

In Washington, D.C. last week, Senate Majority Leader Harry Reid’s office confirmed that the Senate will take no action this year on closing the tax loophole that saves private equity and other private investment fund managers an estimated $12 billion a year.

So what does all that money buy besides huge yachts? Well, it looks like there’s a sale on politicians! Get them while the getting is good!

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate

Share your feedback: We’re planning to launch a new version of the comments section. Help us test it.