Investing

Warren Buffett says the wealthy are 'undertaxed' compared with the rest of the US population

Key Points
  • "As we get more specialized, the rich will get richer. The question is: How do you take care of a guy who is a wonderful citizen whose father died in Normandy and just doesn't have market skills? I think the income tax credit is the best way to address that," Buffett says.
  • "That probably means more taxes for guys like me, and I'm fine with it," he says.
Warren Buffett: The wealthy are undertaxed
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Warren Buffett: The wealthy are undertaxed

Billionaire Warren Buffett said Monday wealthy Americans are not paying enough taxes.

"The wealthy are definitely undertaxed relative to the general population," Buffett told CNBC's Becky Quick during a "Squawk Box" interview. "As we get more specialized, the rich will get richer. The question is: How do you take care of a guy who is a wonderful citizen whose father died in Normandy and just doesn't have market skills? I think the income tax credit is the best way to address that."

"That probably means more taxes for guys like me, and I'm fine with it," he said.

Some lawmakers, including socialist Rep. Alexandria Ocasio-Cortez, D-N.Y., are pushing for higher taxes on the wealthy. She recently proposed a 70 percent marginal tax on incomes over $10 million in an effort to bridge the growing gap between the rich and the poor.

Microsoft co-founder Bill Gates — a close friend of Buffett — said earlier this month that he supports more "progressive" taxes on this rich, but contended that plans like Ocasio-Cortez's are missing the point. "They have income that just is the value of their stock, which if they don't sell it, it doesn't show up as income at all, or if it shows up, it shows over in the capital gains side. So the ability of hedge fund people, various people — they aren't paying that ordinary income rate," he said.

Democratic presidential hopefuls Elizabeth Warren and Bernie Sanders have also proposed higher taxes on the wealthy. Warren's "ultra-millionaire" tax would apply to people with more than $50 million in assets and is projected to raise $2.75 trillion over a 10-year period, according to her team. Sanders has proposed hiking estate taxes for rich heirs.

Buffett's comments come after Charlie Munger, his right-hand man, told CNBC earlier this month that states like California and Connecticut have been "stupid" for driving rich people away because of their tax rates.

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