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Wed October 12, 2011
In Exchange With Congressman, Buffett Discloses His Earnings, Taxes
Originally published on Wed October 12, 2011 4:42 pm
Rep. Tim Huelskamp (R-Kan.) and billionaire Warren Buffett have been involved in a cordial back-and-forth about Buffett's now-famous New York Times op-ed in which he implored the government to raise his taxes.
Earlier this month, Huelskamp sent a letter to Buffett asking him to release his tax returns in effort to prove once and for all that he paid a lower tax rate than his secretary. He said, if Buffett released his taxes, so would he.
Buffett responded with letter, yesterday, in which he said he is "eager" to release his tax returns if Huelskamp can convince some of the other "ultra rich" — his term — to release theirs.
Buffett's claim — which has become known as the Buffett Rule — in The New York Times received heavy scrutiny and the bottom line is that it's complicated. In the aggregate, Buffett is generally wrong, the Tax Policy Center found.
"On average, high income people do pay significantly higher tax rates than those lower down the economic food chain," they report. "Those making $75,000 to $100,000 pay an average effective tax rate of about 17 percent, and those making more than $1 million pay 29 percent." But, reports Bloomberg today, a study by the Congressional Research Service found that 25 percent of millionaires "pay federal taxes at lower effective rates than a significant portion of middle-income taxpayers..."
In his letter to the congressman, Buffett stood by his assertion, offered a wager and dropped some very specific numbers:
Your letter suggests some doubt as to whether the figures I quoted from my 2010 return were accurate. If you can get any of the ultra rich to release their returns simultaneously with mine, I will be willing to have a pre-release wager with anyone who wishes for any sum that they wish that the figures in my return will be exactly those used in my op-ed piece. To be specific, my adjusted gross income (line 37) was $62,855,038, my taxable income (line 43) was $39,814,784 and my federal income tax (line 60) was $6,923,494. In addition, my payroll taxes were $15,300. There are at least several Kansas taxpayers with incomes exceeding mine and it would helpful to your analysis if you would obtain comparable figures from them.
If you do the math, it means Buffett paid 17.4 percent of his taxable income in taxes.
Huelskamp responded today by saying Buffett needs to release his tax returns to explain "how he shelters millions of dollars in income from taxation."
"By sheltering millions of dollars of income from taxation, probably through charitable giving, Mr. Buffett demonstrates that he doesn't trust Washington with his own money either," said Huelskamp in a statement. Then he went to say that if Buffett is so concerned about paying "his fair share," he "is more than able to send voluntary contributions to President Obama and the rest of the federal government."