Tax
Investors Support "Buffett Tax" On Rich; US Poll Respondents Not So Keen
Global investors strongly support US President Barack Obama’s proposed tax hike on people earning $1 million a year or more, a rise inspired by famed investor Warren Buffett, who has claimed he pays a smaller share of income in tax than his secretary.
Respondents to a Bloomberg Global Poll supported the so-called “Buffett rule” by 63 to 32 per cent. The poll was conducted among 1031 investors, analysts and traders.
Earlier in September, Obama said ensuring the wealthy pay at least the same tax rate as the middle class was “just the right thing to do.”
Buffett’s remarks have been controversial. According to a recent article in the Wall Street Journal (27 September), data from the Internal Revenue Service shows that a large majority of people earning $1 million or more annually pay taxes two to three times higher than those earning $100,000 or less. It said that in 2008, the average tax rate for millionaires and above was 23.3 per cent. For those between $30,000 and $50,000, the rate was 7.2 per cent. The WSJ has called on Buffett to release his tax returns to explain how he has managed to pay such a low rate.
In the US, support for the idea was lower than for the global response in general, with more than half opposing it, although four in 10 supported it. “The US does not have a tax rate problem - we have a spending and entitlement problem,” poll respondent Jay Wright, managing director of Samco Capital Markets in San Antonio, Texas, was quoted as saying. “And if we do not address it quickly we are going to be Greece.”
Support for the millionaire’s tax was highest in Europe. European poll respondents backed the tax hike idea by 78 per cent to 17 per cent; respondents in Asia supported the President’s idea 69 per cent to 21 per cent.
A number of countries, such as France and Spain, have pushed for wealth taxes to close fiscal deficits. In the UK, by contrast, it has been suggested the coalition government may scrap the 50 per cent top tax rate on incomes of £150,000 or more, although property taxes may be hiked as part of any deal.
