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Warren Buffett Watch
Text Size 
Becky: Barack Obama has been the person that you're supporting. This is the first time you've really had a chance to talk since Hillary Clinton dropped out of the campaign, but you're holding a fund-raiser for him next week.
Buffett: July second.
Becky: July second. We watched some of the numbers coming in in May and Barack Obama's fund-raising ability slowed down significantly in May. McCain has picked up. Do you think that's a temporary, one-time blip, or are these two candiadtes going to be running neck-and-neck when it comes to fund-raising.
Buffett: Well, I think Barack is going to have plenty of money. I mean, he gave up on federal financing. So I don't think money is going to be a problem for either candidate. The American public, when they go to the voting booth in November is going to have a very good fix on both candidates and the shortage of money will not impair them having that fix. So I think money is going to be a non-issue in the campaign.
Becky: Barack Obama did give up on public financing after saying he would accept it. What did you think of that move?
Buffett: I wouldn't have, I don't agree with that.
Becky: You don't agree with him changing his position?
Buffett: I don't think he should have, yeah.
Becky: What about the idea of supporting windfall taxes against the oil companies? He's the candidate you support, but if you start talking about taking windfall taxes out on the oil companies, is that something you would agree with?
Buffett: I think it's very hard to have windfall taxes. Steel has doubled in price. Is that a windfall for the steel producers? Sure. Corn is, you know, $7 a bushel. Soybeans are at $15 a bushel. I don't think any candidate in his right mind who is standing for election in farm states would say you ought to tax farmers especially because they're getting a windfall. But they are getting a windfall from commodity prices. Maybe they deserve it because commodities have been underpriced. But to pick out one commodity, with copper at $3.60 a pound you could say that the copper producers are getting a windfall. You know, the networks are getting a windfall because the Olympics are being held. So I don't think that taking anybody that's had a commodity that increased in price a lot and saying there ought to be a special tax because of that really makes a lot of sense. I do think the tax code should be changed in major ways, but I don't think that's the way to do it.
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Becky: How do you think the tax code should be changed?
Buffett: I think the super-rich should pay more and people in the middle class and lower should pay less.
Becky: If you start looking at the proposal that's been put forth with social security taxes which includes stopping, still, at 102,000 for social security, but then picking up that payroll tax at $250,000. Is that your idea of a good change?
Buffett: The payroll tax is a third of all taxes raised. Over 900 billion dollars out of 2.6 trillion. So the payroll tax is terribly important. It quits at $100,000 for a guy like me. So I pay practically no payroll tax in relation to my income. Most of the people that are going to be -- people are going to be serving us the steak in this restaurant today are paying a very, very high, they're paying 15.3% or so in payroll taxes. I am paying a tiny fraction of 1% of payroll taxes. I think there should be a major overhaul of the payroll tax. I think guys like me should pay more.
Becky: Although there are people who have said, under this new proposal that's been put out, it would end up meaning that someone like an entrepreneur goes back to a tax rate of 50%. And that is even before you include some of the state and local taxes. Do you worry that if entrepreneurs and other people are taxed at 50% to 60%, depending on where they live and how much they make, that it will stop innovation? That it will harm some of the innovation?
Buffett: I worry about my cleaning lady paying 15.3% on payroll tax when I pay on my total income tax, capital gains and dividends, 15. So, she is paying a higher tax rate than I am, but she doesn't have the lobbyists talking for her. The United States government raises about -- spends about 20% of the GDP. Nobody wants to pay their share. That's human nature. But the Congress has the job of saying we're going to get 20% of GDP from the American government because the American people demand these services and so on. And the question is, they get it from anybody that pays it, they're not going to like it. You have to figure out on a basis of your own idea of social justice and making sure that the golden goose keeps laying golden eggs. What is the best system? I think the answer is to tax the super-rich more.
Becky: You are going to be having lunch today with two people that paid more than $600,000 for the opportunity to sit down with you. These two gentlemen, have you spoken to them at this point?
Buffett: No, I've had some correspondence with them. I'm looking forward to speaking with them.
Becky: What do you think you'll be talking about? I know they brought their children and wives along. What's your plan for this lunch?
Buffett: We'll be talking about anything they're interested in. We'll talk as long as they want to talk, and we'll talk about the subjects they want to talk about. If you want to pay $660,000, we'll talk about anything you want to talk about, Becky. Maybe even the Anheuser deal. (Laughs).
Becky: Great. One more question for you. There have been people who have been saying just taking a look at politics and some of the things out there that maybe you would be interested in getting on a ticket at some point. Is there any truth to that?
Buffett: No. I will go Sherman one better, whatever he said.
Becky: Okay. Mr. Buffet, thank you very much for your time. We appreciate it.
Buffett: Thank you.
Current Berkshire price: [US;BRK.A
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