Brian Pan

Barak Obama, The Audacity of Hope:

Buffett had invited me to Omaha to discuss tax policy. More specifically, he wanted to know why Washington continued to cut taxes for people in his income bracket when the country was broke.

“I did a calculation the other day,” he said as we sat down in his office. “Though I’ve never used tax shelters or had a tax planner, after including the payroll taxes we each pay, I’ll pay a lower effective tax rate this year than my receptionist. In fact, I’m pretty sure I pay a lower rate than the average American. And if the President has his way, I’ll be paying even less.”

Buffett’s low rates were a consequence of the fact that, like most wealthy Americans, almost all his income came from dividends and capital gains, investment income that since 2003 has been taxed at only 15 percent. The receptionist’s salary, on the other hand, was taxed at almost twice that rate once FICA was included. From Buffett’s perspective, the discrepancy was unconscionable.