BUFFETT: Well, I don't think they — they probably wouldn't fly today and I don't think they necessarily need to fly today. What you really need to do is have tax rates that people pay. And, you know, as I point out people — I think people have generally thought that people with $270 million of average income were probably paying a rate that was equal to — it isn't just the secretary in my office, it's everybody in my office. I think they probably thought they were paying in the 30s or something like that till you actually look up the figures. And incidentally if you go back to 1992, almost all of them were. It's just that the code has gotten to favor more and more the extremely wealthy and that's why the wealthy have seen — they've seen their net worth — the net worth of the Forbes 400 since 1992 has gone from 300 billion to a trillion five, five for one. So it — you know, we have a system that has drifted toward favoring the ultra-rich and...
JOE: You know, Warren...
BUFFETT: ...you know, we — but I don't — I don't — I don't think — I don't think we ought to go back to 70 percent rates, no.
JOE: I keep getting — I keep getting this question. You own — you own roughly a third of Berkshire Hathaway. Why don't you consider that the $2 billion that you pay — that Berkshire pays a certain tax bill, you own a third, so basically that income that Berkshire gets, the $2 billion, why don't you consider that as something that — that would skew your tax rate a little bit higher. You include it in your net worth. Why don't you include that $2 billion, your pro-rata share of Berkshire's tax bill since you don't pay yourself any ordinary income or minimal why don't you consider that as part of your tax bill?
BUFFETT: Well, I'm going to give away every share, every single share of Berkshire I have so that really belongs to philanthropies. You can argue that philanthropies may be paying it...
JOE: Or paying 2 billion.
BUFFETT: ...but I just — I've heard the double taxation article — argument a lot and actually I have — I have Governor Romney's tax returns here as well as my own tax returns. And it's kind of interesting. Here is, for example, in 2004 I had 46 million of capital gains. And, Becky, you can put up the last page of that return and you'll see on that return that millions and millions of dollars to capital gains and a few thousand of that was doubly taxed. I made a lot of that, millions and millions of dollars, from profits and Treasury inflation-protected bonds. There's no double taxation there. I made some of it from real estate investment trusts. There's no double taxation there.
Here are the same figures for 2006 when I had 40 million of capital gains and here's the last page of my schedule D there. Every single one of those stocks in which I was making millions of dollars was a Korean stock. They didn't pay a dime of United States federal income tax. So, and if you look at Governor Romney's return you'll see that he made substantial capital gains from companies where the companies themselves went public, but they in some cases pay no federal income tax and in other cases have paid very minor federal income taxes. So it is true there is some double taxation. There's an enormous amount of double taxation though with my secretary. If she gets a salary of X and we won't use her. We'll just use anybody who gets a salary of $100,000. They are paying 13.3 this year, 15.3 in 2010. They're paying 13.3 percent in payroll taxes and then that same income gets doubly taxes and gets taxed for income tax purposes. They get no deduction for their Social Security taxes in computing their federal income tax. So we have double taxation for tens and tens and tens and tens of millions of people who are making very small amounts of money.
BECKY: Warren, let me ask you this, though. By continuing to push this we did get a lot of questions, presumably from shareholders. One that came in was from David Evaul who said that having political positions are a part of public life. But for the life of me "I cannot understand why the CEO of a publicly traded company would antagonize roughly half of the political power in this country. Don't you have a fiduciary responsibility to shareholders not to get into such a public and antagonistic debates, no matter what your political views might be? It seems even Democratic shareholders would prefer you move to the sidelines of the political debate."
BUFFETT: No, I don't think if you're a CEO that you put your beliefs in a blind trust. I mean, I don't think you give up your citizenship. We have 270,000 people who work for Berkshire. There's not one of them that I've ever asked about their political views, or there's not one of them that I've told in any way to refrain from expressing their beliefs whether they're religious beliefs or political beliefs. And I think that — my cleaning lady, Mary, does not have voice. She doesn't have a super PAC, she can't spend $10 million trying to influence, you know, under free speech. I mean, free speech for her is something you can read about in the First Amendment. It doesn't mean a thing. I do have some kind of ability to speak out and I think that if you have an ability to speak out and you see things that you think are wrong I think you ought to talk about them.
BECKY: Let me ask you how this has gotten played in the political debate, though. There's another question that came in from Larry Polena in Cleveland, Ohio. Control room, it's number 40. He says, "It seems like the president has expanded the tax increase proposal you had, yet is still attaching your name to it. I thought the proposal you made was much more narrow than what the president has talked about when he talks about the Buffett tax proposal. Can you explain the idea you originally had and how it is more narrow in scope in terms of the number of people affected than what the president's talking about"?
We had a lot of people who said the 250,000 rate vs. the million.
BUFFETT: No. I never said 250. The Wall Street Journal sort of implied I said 250 in an editorial there, so I can see how people may have gotten that idea. But I have said above a million and I've said a minimum tax. And there are plenty of people that make over a million, over 5 million, over 10 million that pay normal tax rates. And I would not have — what I talk about would have no effect on them at all. It's only the people who are paying very low tax rates like me, but like some of my friends and like those 131 out of 400 who had an average income of 270 million who are paying less than 15, those are the ones I'm talking about. So I would have a minimum tax above a million and perhaps a different level of minimum tax above 10 million. Now Senator Whitehouse of Rhode Island has introduced a bill that is largely along that line. But it is — it does not apply to people with 250, it does not apply to everybody that makes 100 million.
BECKY: And what's your understanding of the president's understanding of the Buffett rule?