Whine, whine whine.
Warren Buffett says raise taxes on folks making more than $200,000 because he pays a lower tax rate than his secretary and he wants to pay more.
Music to Obama’s ears … and an anecdotal rationale for allowing all of Bush’s high-end tax cuts to expire.
Problem: Even if the Bush tax cuts are allowed to expire, Warren will still be paying a lower rate than his secretary.
Consider the generic uber-wealthy case …
Obama’s proposal would allow the top marginal tax rates of 33 percent and 35 percent to revert to 36 percent and 39.6 percent next year. Phase-outs for deductions and exemptions would also be reinstated, pushing the rate higher.
Tax rates on dividends and capital gains would increase to 20 percent from 15 percent.
The top marginal rates also don’t reflect the overall tax the highest earners pay, especially when most of the income comes from capital gains or dividends.
The 400 highest-earning U.S. households reported an average of $345 million of income in 2007, while their average tax rate fell to 16.6 percent, the lowest in almost 20 years.
Almost three-quarters of the highest earners’ income was in capital gains and dividends taxed at a 15 percent rate.
Of the 400 earners, 289 paid a total effective federal tax rate of 20 percent or less in 2007.
Buffett’s income is practically all capital gains.
So, Obama’s plan will nick him an additional 5% … but since his rate will be the 20% capital gains tax rate, it’ll still probably be below his secretary’s rate.
I propose a super-uber tax bracket: for folks with huge portfolios — say, in excess of $5 billion — every dollar of earnings over $250,000 — ordinary income, cap gains, and dividends — gets turned over to the government each year with no recourse.
Bingo. Problem solved.
The Homa Files 
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