Behind the Headlines Video
Billionaire investor Warren Buffett wrote in the New York Times in 2011 that the wealthy should pay a higher percentage of their income in taxes than do the middle class.
The wealthy do pay a higher rate on personal income. But everyone in America is taxed at a lower rate for dividend and capital gains income.
[For several decades Buffett advocated tax avoidance strategies at his firm.]
President Obama has called this the Buffett Rule in his campaign for higher taxes.
Critics have called Buffett a hypocrite. And for good reason.
When he wrote his New York Times op-ed his company Berkshire-Hathaway [the 8th largest company in the world] owed taxes of more than one billion dollars going back 10 years. In 2005, his company settled with the IRS a separate tax battle it waged for 14-years.
[Berkshire-Hathaway's $1.2 billion stock buy-back in December 2012 may have been timed in order to avoid an expected increase in tax rates in 2013.]
Well, at least he'll pay more with the 2013 Obama tax hikes. Well, maybe not.
Left out of this year's tax hikes is a carve-out that allows some of the nation's wealthiest -- including billionaires -- to pay a reduced tax rate. Private equity managers, hedge fund managers and venture capitalists get this rare deal. Their personal income is called "carried interest." It's taxed at only 20 percent rather than the top personal rate of nearly 40%.
Some of the biggest supporters and donors to Barack Obama's reelection would benefit from this special tax break.
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