Buffett: Raise tax cutoff point to $500K

Warren Buffett called Monday for the cutoff point in U.S. President Barack Obama's proposal to end the Bush-era tax cuts to increase to $500,000 from $250,000. "I support President Obama's proposal to eliminate the Bush tax cuts for high-income taxpayers," the business magnate, investor and philanthropist wrote in an op-ed piece published in The New York Times Monday. "However, I prefer a cutoff point somewhat above $250,000 -- maybe $500,000 or so." He also called on Congress, "right now, to enact a minimum tax on high incomes. "I would suggest 30 percent of taxable income between $1 million and $10 million, and 35 percent on amounts above that," he wrote. "A plain and simple rule like that will block the efforts of lobbyists, lawyers and contribution-hungry legislators to keep the ultra-rich paying rates well below those incurred by people with income just a tiny fraction of ours. Only a minimum tax on very high incomes will prevent the stated tax rate from being eviscerated by these warriors for the wealthy. "Above all, we should not postpone these changes in the name of 'reforming' the tax code. We can't let those who want to protect the privileged get away with insisting that we do nothing until we can do everything." He said no wealthy person is going to stop investing if tax rates rise, despite conservative arguments they will. He said he was managing funds for investors from 1956 to 1969, when the top marginal tax rate on dividends was a lofty 70 percent, compared with the current 35 percent, and the tax rate on capital gains was 27.5 percent, compared with today's maximum 15 percent. "Never did anyone mention taxes as a reason to forgo an investment opportunity that I offered," he said in the article. "Under those burdensome rates, moreover, both employment and the gross domestic product ... increased at a rapid clip. The middle class and the rich alike gained ground. "So let's forget about the rich and ultra-rich going on strike and stuffing their ample funds under their mattresses if -- gasp -- capital gains rates and ordinary income rates are increased. The ultra-rich, including me, will forever pursue investment opportunities." Buffett said more than a quarter of the people with the 400 highest U.S. incomes "paid less than 15 percent of their take in combined federal income and payroll taxes," he said, citing 2009 figures, the most recent year reported in a study. "Half of this crew paid less than 20 percent. And -- brace yourself -- a few actually paid nothing." These people earned an average $202 million in 2009 -- "which works out to a 'wage' of $97,000 per hour, based on a 40-hour workweek," Buffett said. "I'm assuming they're paid during lunch hours," he added in parentheses.