By Jeanne Sahad
Billionaire investor Warren Buffett doesn't think Congress has asked him or his super rich friends to sacrifice anywhere near enough.
NEW YORK (CNNMoney) -- Warren Buffett is once again begging Congress to tax him more.
"My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government to get serious about shared sacrifice," the founder of holding company Berkshire Hathaway (BRKA,Fortune 500) wrote in a New York Times opinion piece on Monday.
Unlike President Obama, who wants to raise the top two tax rates on individuals making more than $200,000, Buffett wants income and investment tax rates raised only on those making more than $1 million in taxable income. In 2009, they represented just 0.2% of tax returns -- as opposed to the 2% to 3% who would be affected by Obama's proposal.
In Buffett's view, the very rich don't pay enough in taxes. And he doesn't think asking them to pay more will discourage investment or job creation. Some people will disagree with him on one or both those points. But here's a breakout on what he is talking about.
Why Buffett only pays 17.4% of his income in federal taxes: "Last year my federal tax bill ... was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income -- and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent."
Millionaires who pay no income tax
Unlike most Americans, Buffett and the country's wealthiest taxpayers make much of their income from investments. The capital gains and dividends those investments generate are taxed at a much lower rate than wages. Long-term capital gains and dividends are currently taxed at 15% -- well below the 35% top income tax rate.
Managers of hedge funds and other investment partnerships, meanwhile, enjoy that same rate on the portion of their pay known as carried interest.
In addition, the wealthiest only pay a very small percentage of total payroll taxes, which support Medicare and Social Security. That's primarily because the payroll tax only applies to wage income, not investment income. Come 2013, however, a Medicare tax will be added to a portion of the wealthiest Americans' investment income to help pay for health reform.
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