Since he announced his support for raising taxes on the wealthy, Warren Buffett has become the go-to billionaire boogeyman of the right, receiving a constant flow of personal attacks from conservatives upset that he’s spoken about how his secretary pays a higher tax rate than he does thanks to problems with the tax code.
The latest attack came this morning from MSNBC contributor Pat Buchanan, who bizarrely suggested that Buffett should pay his secretary’s taxes:
BUCHANAN: I tend to think he’s a bit of a hot dog, Joe. You know, I really want to pay more taxes, and my secretary pays more than I do. Why doesn’t he pay her taxes? And why doesn’t he himself pay at the rate he should be?
Of course, the point Buffett is trying to make when he speaks about his secretary is that there is a fundamental problem with the tax code that lets people like him exploit the system to pay less than middle-class Americans. Host Joe Scarborough and Buchanan sort of make this point, ironically, when they attack Buffett and other “super rich” people for using lawyers and accountants to exploit loopholes to pay less in taxes. As long as the opportunity exists, people will continue to take advantage of it.
Conservative responses like Buchanan’s completely ignore this systemic problem. Volunteering to pay more or paying a secretary’s taxes won’t solve anything. One in four millionaires has a lower tax rate (accounting for federal income and payroll taxes) than the median middle-class households. Buffett’s effective federal tax rate of around 17.4 percent is not unusual for investors at his income level, as Citizens for Tax Justice point out, as the average effective tax for people with $10 million or more in investment income is just over 17 percent. Moreover, tax rates have fallen 25 percent since 1995, when the economy was doing just fine.