WASHINGTON — Billionaire investor Warren Buffett isn’t as undertaxed as he and President Obama seem to think.
Buffett recently said that he paid only $6.9 million in taxes last year — just 17.4 percent of his earnings, compared to an income tax rate of about 36 percent paid by his employees.
“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,” Buffett wrote last month in the New York Times.
Such grousing was enough to convince Obama to name his latest tax-the-rich scheme the “Buffett rule.” But it doesn’t tell the whole story.
And yesterday, Obama invoked Buffett’s name again in his case for imposing higher taxes on the wealthy, when he said: “Middle-class families shouldn’t pay higher taxes than millionaires and billionaires.’’
“It’s hard to argue against that. Warren Buffett’s secretary shouldn’t pay a higher tax rate than Warren Buffett. There is no justification for it,’’ Obama said.
Buffett actually was taxed twice on his investment income.
First, Buffett had to make the money he invested. Those earnings were taxed as corporate income, at about a 35-percent rate.
Then, Uncle Sam took another cut when Buffett invested the money and earned a profit. That’s when Buffett paid the 15 percent capital-gains tax rate.
All told, after combining corporate taxes and capital gains taxes, Buffett forked over about 45 percent of his earnings.