Warren Buffett: 'My Side Has Nuclear Bomb' In Tax Code Struggle

Warren Buffett has a lot that his assistant Debbie Bosanek does not, including a figurative arsenal to fight for lower taxes.

After ABC interviewer Bianna Golodryga cited claims by Republicans that the tax code debate is a form of class warfare, Buffett admitted that, while he wouldn't use that term, the tax code is inherently "a struggle." The problem, however, is that people like his assistant lack the artillery to compete.

"If this is a war, my side has had the nuclear bomb," Buffett told ABC News. "We've got K Street and lobbyists. We've got money on our side in terms of contributions."

"Deb doesn't have the lobbyists. She doesn't have anyone remotely representing her."

The billionaire investor, who has become one of the most prominent advocates of raising taxes on the wealthy, told ABC News last night that part of the problem with the U.S. system is that typical Americans, like his own assistant, have a harder time being heard than the elite.

Bosanek, now famously the subject of a New York Times op-ed by Buffett, made headlines this week when she was invited to sit next to Michelle Obama during President Obama's State of the Union address.

Buffett's remark echos previous comments, such as when he described the battle between rich and poor as "a rout," his side victorious. The tax issue was highlighted again this week when Republican presidential candidate Mitt Romney released his tax returns. Romney's returns indicate that in 2010, he paid taxes at about a 14 percent rate -- even lower than Buffett.

Romney, who's worth a minimum estimate of $250 million, contends that due to charitable contributions and corporate taxes his rate "is really closer to 45 or 50 percent."

It's not that the rich are entirely opposed to handing over a bigger chunk of change to the government. A recent survey found that most of those making seven figures or more say they should pay more in taxes. On the whole, the majority of Americans agree.

Comments

[fiction kills]

04:16 PM on 01/30/2012

"If this is a war, my side has had the nuclear bomb," Buffett told ABC News. "We've got K Street and lobbyists. We've got money on our side in terms of contributions." "Deb doesn't have the lobbyists. She doesn't have anyone remotely representing her."

Guess I must have misheard every government and history teacher that I have ever had when they told me that congress was elected to represent the people! Huh. Someone should tell the teachers (and re-write the textbooks to reflect...) that Congress is only elected to represent the wealthy people.

[yatahayaz]

05:41 PM on 01/30/2012

As a high school teacher I've reconciled myself to the fact I teach theory. Under the baby boomer generation everything this country was based upon has been eradicated. As one pundit put it a couple weeks ago: We currently live in a post-Constitution era, where neither the federal nor state governments follow the law. And neither the Attorney General nor the states' attorney generals seem to care.

[Footwarrior]

01:27 PM on 01/31/2012

Special tax deals for the wealthy seldom show up in legislation titles. They lurk in the details of legislation, hidden from public scrutiny.

[MovieGuy2010]

03:08 PM on 01/30/2012

If he was preaching supply side trickle down voodo, you would be singing his praises as if he were Jesus....

[nicothebaker]

03:22 PM on 01/30/2012

But he is not........

[Valerio della Porta]

05:15 PM on 01/30/2012

...and why is he an idiot?

[critterzdad2]

10:45 AM on 01/30/2012

We could call the tax "take a wealthy one to the war and to the cleaners, like it did to the rest of us".

[critterzdad2]

10:43 AM on 01/30/2012

And the one thing that gets rich people to submit to taxes is being branded unpatriotic. Yes, that's right. In time of war the rich willingly agree to higher taxes. So how come we didn't tax the rich more in 2003 to date? Because the rich had a bunch of rich playmates in D.C. Now that the war is over we missed our best chance to raise taxes on those varmints- oh wait. We still are in Afghanistan. And it looks grim in Syria and Iran. And Sudan looks ready to boil over. All these hot spots are costly to police and even more costly to get "boots on the ground"!
We need to start telling the rich that in order to protect their interests HERE we have to spend more to keep wars THERE!
(Not serious here- just teasing, actually) My point is now that the bills are coming due (and OVERDUE) for Iraq and Afghanistan we need the rich to pay a fair share.

[cree1997]

09:40 AM on 01/30/2012

The only way the rich are going to pay their "fair" share is if there is a flat tax. If you make money like Buffet and GE and the tax rate is raised to say 50% you still are only going to pay 50% of what you claim you made after all the legal loopholes and if you have big money you have loopholes. Of course if you only make 20,000 it is almost impossible to pay anything so maybe the flat tax should apply to anyone in the million dollar range. However if you pay no tax and never have you really are not as concerned about how the tax dollars are spent. So it is a catch 22 if you have worked 60 to 80 hours a week your whole life why should you give half of your money when some people do not try to improve their lot in life.

[imusintheevening]

01:39 PM on 01/30/2012

No, a flat tax is more regressive, the better solution is a new Alternative Minimum Tax for all multimillionaires and those other "people", corporations.

[Binckeslaw]

09:39 AM on 01/30/2012

Mitt Romney represents the investor who complains that he is entitled to a 15% income tax rate on his unearned income because he already paid taxes on the investment principle. Several facts are deliberately and conveniently omitted.

Romney's unearned income came from managing and investing other people's money. He didn't pay taxes on the money that his investors earned. A private equity fund typically charges up to 2% of the amount of money it manages annually. It also charges up to 20% of the profits derived from the investments. Romney didn't put up any of his own money; yet, he paid a only15% on his management fees and share of profits.

In a second scenario Romney personally bought shares of X corp at $300 a share. He sold his shares two years later for $400 a share. He pays only 15% on the profit of $100 per share. He didn't pay any corporate taxes. He had nothing to do with the operations at X corp. He should not be able to argue that his profit should be taxed at 15% because X corp was already taxed.

In the third scenario Romney made investments with money that he borrowed. He didn't pay taxes on the money that he borrowed. After two years he sells out of his position and is taxed at only 15% on his profit.

[Grichde]

09:03 PM on 01/30/2012

Sorry Romney does not manage any of the equity funds. He makes income from his investments. That income is interest and dividends which he pays the legal rate of taxes under capital gains.

[Footwarrior]

01:35 PM on 01/31/2012

Middle class taxpayers who invest in a mutual fund that makes profits from short term trades pay taxes as it it was normal income. Why don't hedge fund profits get taxed the same way?

[new beginning]

09:13 AM on 01/30/2012

"If this is a war, my side has had the nuclear bomb," Buffett told ABC News. "We've got K Street and lobbyists. We've got money on our side in terms of contributions."

Why is he fighting so hard with his lobbyists if he really really really wants to pay higher taxes?

And why is there no mention of the Billion in back taxes his company owes and that he is fighting paying?

[MovieGuy2010]

03:12 PM on 01/30/2012

1. Please point out what his lobbyiest are doing and how does the effect PERSONAL income tax rates?

2. ALL big Corporations do the same thing as Berkshire does. they pay late, they fight, etc.

HE is talking about HIS taxes, please, WHY do you all do the switch topics here.

he is NOT talking about BUSINESS TAXES, that is another entire subject.

[new beginning]

03:50 PM on 01/30/2012

Note to MovieGuy, taxes are taxes are taxes. They may come out of different pockets, but they all go into the same black hole.

I beg to differ, tax policy is tax policy. Same subject.

[redonthehead]

08:44 AM on 01/30/2012

How many tax attorneys, and accountants does Berkshire and Buffett employ to keep his taxes low?
Buffett is a hypocrite.

How come the general public weren't allowed to invest in the extra special preferred shares that Buffett bought from Goldman Sachs and Bank of America. Is it fair that his shares pay 10% while the public shares pay about 6%?
Buffett is a hypocrite.

Rather that take is distributions from Berkshire in the form of capital gains why doesn't Mr. Buffett simply pay himself an enormous salary so that his tax bite is maximized?
Buffett is a hypocrite.

[new beginning]

09:08 AM on 01/30/2012

Touche'!!!

[CapitalismIsCancer]

08:50 PM on 01/29/2012

Capitalism is Socialism for gangsters.

[Jim bob]

09:41 PM on 01/29/2012

Where have you been? Fanned and I would have fanned you only for your name and bio. But nice comment too.

[Ed Haskell]

10:31 PM on 01/29/2012

Succinct and deadly accurate. F & F!

[sonoffestus]

08:42 PM on 01/29/2012

The government is for sale................Who would have thought?

[StrictConstitutionalist1]

07:46 PM on 01/29/2012

It was revealed that his secretary makes between $200,000 and $500,000 per year. She also has two homes. Don't try and tell me she's like the "average" American secretary because she certainly is not.

[Jim bob]

09:42 PM on 01/29/2012

the liars are out in force tonite. Can't wait till you go back to your day job as a greeter at walmart.

[Occams Breadknife]

10:28 PM on 01/29/2012

I hope you own property, are white and male, cuz a strict constitutionalist would be old school, and never vote under these new fangled rules from corruptors Andrew Jackson, Woodrow Wilson, and Eisenhower.

[becky bradshaw]

07:23 PM on 01/29/2012

The number of monstrous "Mega-Yachts" has grown by 400% since 1997 (http://www.msnbc.msn.com/id/25804188/ns/travel-luxury_travel/t/where-big-boys-go-berth/).

The Rape of the U.S. Economy began in 1980. The country's top 0.01% make an average of $27 million per year. The average income for the bottom 90%? $31 thousand per year (http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph). That means it takes 870 of your peers to equal the earning power of one of the Aristocrats.

And why do these guys (they are almost without exception men) deserve the money? "Because of Daddy", of course (http://video.google.com/videoplay?docid=-9025259803075781655).

[when will it end]

06:50 PM on 01/29/2012

This is not journalism. The "interviewer" fails to ask the relevant questions such as "how much do you make working for WB? this is liberal propaganda.

[Grichde]

06:50 PM on 01/29/2012

BUFFET RULE, tell everyone you should be taxed higher, than rack in billions in tax breaks in your companies.

[redonthehead]

09:04 AM on 01/30/2012

Fanned! Buffett is a hypocrite. I wonder if he would be so vocal if his proposal had a showball's chance of passing.

[new beginning]

09:16 AM on 01/30/2012

That about says it all.

FF

[Tessie]

12:12 PM on 01/30/2012

Yep, Buffet has a lot to gain from higher taxes on the rich. He is himself a lobbyist for his own personal monied interests.

WSJ pointed out that he "buys up family businesses forced to sell because the heirs’ death-tax bill exceeded the business’s liquid assets. He owns life insurance companies that rely on the death tax in order to sell their estate-planning businesses.

And he profits from govt spending

He made about a billion dollars off of the Wall Street bailout by investing in Goldman Sachs on the assumption that the govt would bail it out. He ahas also planned investments in ethanol giant ADM and government-contracting leviathan General Dynamics."

A lot of business revenue the coming from the U.S. Treasury for him personally, so naturally he wants everybody to have to put more into it.

[Booji Boy]

05:16 PM on 01/29/2012

The two main umbrella unions in America, AFL-CIO the Change to Win Federation, need to adapt to realities of the modern Citizens United, right-to-fire, globalized world. They need to find ways to add value to membership (e.g. legal and legislative representation and health insurance exchanges) and become accessible to people who work in all professions outside of union shops to attract great numbers of members and thus increase their power in the American political process and better countervail the power of the US Chamber of Commerce and Corporations.

[arabbit]

12:14 AM on 01/30/2012

Trumpka ain't gonna throw in with the Occupy. SEIU did march and I think Janitors for Justice too but AFL-CIO isn't populist. Establishment all the way. Their unions lobby for stuff like more prisons, more infrastructure like the Path and Trail electrical transmission lines, mountain top removal mining and the XL Oil pipeline. All this stuff is union labor. It's hard to lobby for pipelines and then stand with the riff raff in the streets.

[Booji Boy]

01:36 AM on 01/30/2012

Yep... I know. The AFL-CIO is a bad joke.