Republicans are getting a great deal of mileage out of an interview investor Warren Buffett gave Friday morning, contending that the billionaire failed to endorse President Obama’s jobs plan or the proposed tax hike that bears his name.
The Republican National Committee, for example, e-blasted a mailer that claimed Buffett had disagreed in a CNBC interview with Andrew Ross Sorkin with Obama’s plan to raise taxes on America’s top earners.
But did Buffett actually say that? More than anything, while interviewed on the floor of the New York Stock Exchange, he took a pass on commenting on Obama’s plan at all. As they used to say in the 20th century, let’s go to the videotape:
Andrew Ross Sorkin: “Let’s talk about the Buffett Rule for a moment. Talk to me about how it came about in terms of the White House getting in touch with you and you putting your name to this?”
Warren Buffett: “Well, [National Economic Council Director] Gene Sperling called and said, ’Can we use your name?’ And I said, yes.”
Sorkin: “Are you happy you said yes?”
Buffett: “Sure, I mean I wrote about it.”
Sorkin: “Are you happy with the way it’s been described? Is the program that the White House has presented -- a million dollars and over -- your program?”
Buffett: “Well, the precise program, I don't know what their program will be. My program would be on the very high incomes that are taxed very low -- not just high incomes. Some guy making $50 million playing baseball, his taxes won’t change. If you make 50 million dollars a year appearing on television, his income won't change, but if they make a lot of money and they pay a very low tax rate, like me, it would be changed by a minimum tax that would only bring them up to what the other people pay .”
Sorkin: “Does that mean you disagree with the president's new jobs proposal, which would be paid for by raising taxes on households with incomes of over $250,000?”
Buffett: “That's another program that I won't be discussing, but my program is to have a tax on ultra-rich people who are paying very low tax rates. Not just all the rich people. It probably would apply to 50,000 people in a population of 310 million.”
Sorkin: “That means you disagree with the president on the 250,000?”
Buffett: “No, no, you may disagree –“
Sorkin: “I’m asking, you agree that 250,000 is the right number?”
Buffett: “I will look at the overall plan that gets submitted to Congress, which they are voting on, and decide, net, do I like it or do I not like it? There’s no question there will be parts I’ll disagree with.” (Watch the video of the interview at the end of this article.)
Part of the confusion stems from Obama’s use of Buffett's name in recent speeches as promoting the idea the rich “pay their fair share.” The Buffett Rule, as Buffett described in the interview and as he has proposed elsewhere, would affect a small percentage (less than 1) of America’s wealthiest citizens and would elevate the rate they pay on capital gains to be comparable to middle-class tax rates.
Essentially, the proposal was boiled down to a metaphor that has billionaires such as Buffett paying taxes at a lower rate than their “secretaries.”
When Obama rolled out his version of the rule, it was described as a tax on millionaires, but in truth, it wouldn’t affect most people who earn more than $1 million a year unless they derived most of their income from investments.
Along with that proposal, Obama has advocated letting the George W. Bush-era tax cuts expire for families making more than $250,000 a year—something which has nothing to do with Warren Buffett or the “Buffett Rule.”
Here’s what Buffett told the Fox Business Network Friday:
“I didn’t say the wealthy should pay more. I said the ultra-wealthy who are paying very low tax rates should pay more and the figures show that the 400 top tax payers who earned an average of almost $230 million apiece were paying 21% in a combined payroll tax and income tax, which is well below what all the people in my office pay now. What I’m talking about would not apply to someone that made $5 million a year as a baseball player or $10 million a year on media. It would apply only to probably 50,000 people out of 309 million who have huge incomes pay very low taxes. If you have a country with a deficit of over a trillion dollars and you think it can be solved by voluntary tax payments then you believe in the tooth fairy. There should be a policy that applies to people with money who earn lots of money and pay very low rates. If they earn it by normal jobs what I say would not hit them at all.”