Buffett urges rich to pay more tax

Warren Buffett, probably the world's most successful private investor, claims he will donate 15% of his income to help pay down US national debt - if 10% of Congress also agrees to join him.

Buffett says that the current lower rates of tax are unsustainable - particularly the 80,000 very high earners like himself who should, he says, pay more.

Pay more

Buffett claims that his own tax rate is about the rate he was charged when he was a much younger man making around £10,000 equivalent a year. He told Bloomberg TV that many American millionaires should simply be prepared to pay a significantly higher tax rate. Period.

"If you can get a significant percentage of Congress to do that, I would do it," he is reported as saying the Daily Telegraph. "Ten per cent of Congress, sure. It is not that contributions will amount to anything significant - but it draws attention to it [the issue]."

Too low

The issue is particularly sensitive given widespread interest in the tax affairs of politicians. The current candidate for the Republican presidential nomination, Mitt Romney, is going public with his 2010 tax return shortly following criticism that his own rate of tax is too low.

Bear in mind that Buffett is talking about tax rises for already wealthy people with incomes typically more than £600,000. Much of Buffett's own overall taxable income, because of long-term capital gains and dividends, is taxed at the 15% rate. This makes his effective average taxable rate - probably around 17% - some way from the higher US rate of tax.

In fact, it's alleged Buffett even pays less tax currently than his secretary.
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