Warren Buffett: ‘mega-rich’ should pay more tax

The American billionaire investor Warren Buffett has called on the US government to "stop coddling" the super-rich and raise their taxes to help balance the country's books. Writing in the New York Times yesterday Buffett, the world's third richest person, argued that cutting the "extraordinary" tax breaks given to the wealthy would not inhibit investment or job growth.

A long-time critic of the US tax system, Buffett claims in his op-ed that America's wealthiest individuals are not making a fair contribution to fixing the nation's finances. "Our leaders have asked for 'shared sacrifice'. But when they did the asking, they spared me," he wrote. "I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched."
 
Buffett, the 'Oracle of Omaha' who has previously called the current financial crisis "poetic justice" for greedy bankers, added: "While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks."
 
His personal fortune may have been estimated at $50bn by Forbes this year but Buffett said that his last tax bill was $6.9 million - just 17.4 per cent of his taxable income. The other 20 people in his office paid around double this percentage - an average of 36 per cent, he said.
 
"These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species," the 80-year-old industrialist and philanthropist quipped. "It's nice to have friends in high places."
 
Buffett argues that the new Congress 'super committee' - a bipartisan panel which is currently trying to find $1.5 trillion worth of savings and cuts to reduce the national deficit - should raise the tax rate paid by those earning at least a $1 million a year. Those who make $10 million or more annually should pay an additional tax increase, he adds.
 
The business news agency Bloomberg said today that Buffett's call to raise taxes for the "mega-rich" could add force to Barack Obama's recent proposal to end tax breaks for "corporate jet owners" as well as oil companies and hedge fund managers. In June the president argued that closing the tax loophole for those who own private planes would put $3 billion into the Treasury over a decade. His comments are also likely to anger the Republican Tea Party movement, which is adamant that the only way to cut America's massive budget deficit is to slash public spending.
 
Yet Buffett remains sceptical about the ability of the current "billionaire-friendly Congress" to find a way out of America's debt crisis. He said: "Americans are rapidly losing faith in the ability of Congress to deal with our country's fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness." ·