Leader: Buffett shakes up the tax-the-rich debate

Published on Sunday 14 August 2011 14:43

AMID the rancour that is American deficit-reduction politics, the mega- millionaire Warren Buffett has uttered the unspeakable in Republican circles: the mega rich should pay more tax.

While America's tax regime for the wealthy is more generous than ours - staggeringly so given the examples quoted by Buffett - it will have resonance here with the continuing debate over the 50 per cent tax regime. It may not raise much in tax - but it is surely politically necessary to help public acceptance of the deficit reduction package. And given the continuing sharp rises in the pay, perks and pensions of FTSE 100 chiefs, they continue to party away in a world that seems quite unaffected by the global financial crash.

In an article for the New York Times, Buffett, the popular stock market investment guru followed by millions, spilled the beans, saying that "we" mega-rich continue to get extraordinary tax breaks "while the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet".

He worked out his tax rate was 17.4 per cent of taxable income, a lower percentage than that paid by his office staff where the average was 36 per cent. This is Manna for Obama - and a challenge to those adamant that deficit reduction should mean "no new taxes".