Power Players

Warren Buffett on wealth inequality: 'A rich family' takes care of its own and the US should too

Billionaire investor Warren Buffett: This is what we need to do about income inequality
Billionaire investor Warren Buffett: This is what we need to do about income inequality

Investing tycoon Warren Buffett has benefited handsomely from the United States' market economy. At 88, the CEO and chairman of Berkshire Hathaway is currently worth $83.3 billion, according to Forbes. 

He has more money that he could ever spend, he told CNBC's Becky Quick Monday. If he tried to spend all of his money, "I don't know what in the world I'd spend it on," Buffett said.

In fact, the three richest people in the world — Amazon founder Jeff BezosMicrosoft co-founder Bill Gates and Buffett — have more wealth half the population of the U.S., according to a November 2017 report from progressive think tank Institute for Policy Studies

That gap in wealth in equality, "has widened and will continue to widen unless something is done about it," Buffett told Quick.

Warren Buffett, Chairman and CEO of Berkshire Hathaway.
David A. Grogan | CNBC

But while wealth inequality is a problem, Buffett does not support disrupting the country's market economy, which he likens to "the goose that lays the golden eggs."

"[T]he most important single thing is to have more 'golden eggs' to distribute around," Buffett said. "So I don't wanna do anything to the goose that lays the golden eggs. And we've had the goose that lays more and more golden eggs over the years, unbelievable in this country."

"So we've got something that works in terms of the market system in terms of turning out lots of goods and services people want," Buffett said.

However, Buffett says the U.S. should use the fruits of its economy to provide for those who are not able to take care of themselves, in the same way that a family would take care of one of its own.

Watch CNBC's full interview with iconic investor Warren Buffett
Watch CNBC's full interview with iconic investor Warren Buffett

"The question is, What happens to the person who's a decent citizen, doesn't have market skills? And we can solve that," Buffett said.

"A rich family can handle if they've got six children and one of them isn't as good in the market ... is just good in every other personal quality. They take care of him," Buffett said. "So we can take care of people and we should. But we shouldn't screw up the market system."

Indeed, Buffett will give away the majority of his wealth as part of The Giving Pledge, an organization he co-founded with Gates to encourage wealthy individuals to publicly commit to significant philanthropy efforts.

Gates has also said he supports capitalism as a fundamental economic structure but, like Buffett thinks the wealthiest individuals ought to take care of those who are less fortunate.

"Now you can say I'm biased because this [capitalist] system has worked very well for me, and I feel — I plead guilty to that," Gates told CNN's Fareed Zakaria earlier in February. "But as I look overall at the capitalist economies, there are a lot of good things doing, and I think you can tune the tax parameters and get way more equity and get some additional government services and still be in the same basic framework."

See also:

Bill Gates: Taxes on rich should be 'much higher' but capitalism still works — here's why

Hedge fund billionaire Ray Dalio: 'Capitalism basically is not working for the majority of people'

Ocasio-Cortez's 70% tax plan gets fierce response, but even Warren Buffett says rich should pay more

Here are billionaire Warren Buffett’s best investing tips
Here are billionaire Warren Buffett’s best investing tips