Warren Buffett: Newly Hired Money Managers Not Bothered By Higher Tax Rate
Warren Buffett says the two new money managers he hired will be paying taxes at a much higher rate now that they'll be getting a salary from Berkshire Hathaway.
The Omaha World-Herald's Steve Jordan reportsin a brief interview at an Omaha event, Buffett pointed out that even though Ted Weschler and Todd Combs will be "doing exactly the same thing" at Berkshire as they had been doing for their hedge funds their tax rate will roughly double.
Instead of paying a 15 percent capital gains rate on their portion of the fund's profits, Weschler and Combs will be taxed at a rate of 30 percent or more on their Berkshire salaries and bonuses.
Buffett has been critical of that disparity, arguing most recently in a New York Times op-ed ("Stop Coddling the Super-Rich") that it allows very wealthy Americans to pay a lower tax rate than people who don't make most of their money through investing.
Supporters of the current "carried interest" distinction argue the lower rate is needed to encourage hedge managers to put their own money at risk. They warn that higher taxes would discourage needed investments and could drive some people, and their wealth, out of the country.
Buffett counters that most of the wealthy people he knows think they're not paying enough in taxes and are ready to participate in a "shared sacrifice" to reduce the nation's deficit.
He tells Jordan that Weschler and Combs aren't bothered "one bit" by the prospect of paying more in taxes.
Buffett was attending a dedication ceremony at the University of Nebraska Medical Center.
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