Good news for Warren Buffett: A new government analysis finds support for the billionaire's controversial call to raise taxes on the wealthy, as he released his own tax data to back up the argument.
The report, by the nonpartisan Congressional Research Service, found that when all federal taxes are taken into account, a quarter of U.S. millionaires pay a smaller share of their income in federal taxes than many middle-class families, according to The Washington Post.
Buffett earned almost $63 million last year and paid less than $7 million in federal income tax, he said in a letter sent to Rep. Tim Huelskamp, R-Kan., on Tuesday, The Wall Street Journal reports. The Berkshire Hathaway CEO has been a longtime advocate for increasing taxes on the wealthiest Americans.
“I hope you succeed in getting the ultra rich—who, as a group, are paying less of their income to the federal government than their receptionists—to share in the sacrifice many millions of other Americans soon will be asked to do,” Mr. Buffett said in the letter.
Huelskamp and other prominent Republicans have challenged Buffett’s calls for raising taxes on the wealthy, arguing that it punishes investment and job-creating small businesses. Buffett has not released his income-tax return, which some Republicans have challenged him to do, but Tuesday's letter shed more light on Buffett's personal situation.
President Obama has embraced Buffett’s calls for raising taxes on the wealthiest Americans, proposing the "Buffett rule" and supporting Senate Democrats’ proposed 5.6 percent surtax on individuals making $1 million or more each year as a means to pay for the American Jobs Act. Senate Republicans blocked the $447 billion jobs bill on Tuesday.
But the CRS report rebutted congressional Republicans’ claims that the Buffett rule would harm small business, finding that just 1 percent of tax returns with business income have an adjusted gross income over $1 million a year, and those are some of the least likely businesses to create jobs.
While report author Thomas Hungerford said that the “current U.S. tax system violates the Buffett rule in that a large proportion of millionaires pay a smaller percentage of their income in taxes than [do] a significant proportion of moderate-income taxpayers,” he also acknowledged the extent of the disparity isn’t as large as Buffett suggested, The Post said.
The report was the first government analysis of federal tax data since Buffett launched his public crusade complaining that his tax rate is less than that of his much lower-earning employees.