Dividend Tax Cut 'Unfair' Says Warren Buffet

by Leroy Baker, Tax-News.com, New York

17 March 2003

Maverick businessman Warren Buffet criticised President Bush's proposal to scrap dividend tax last week. Branding the tax cut as unfair, he said it is likely only to benefit those at the very top of the income scale.

Speaking at a lunch held by the Democratic Policy Committee, Buffett, reportedly the world's second wealthiest man with a fortune of some $30.5 billion, commented that the tax cut, a lynchpin of Bush's economic stimulus plan, would see his personal tax bill cut by some $300 million.

This would effectively see the Berkshire Hathaway chairman paying proportionately less tax than his secretary, lawmakers said in the meeting. According to reports on the luncheon by Bloomburg, Buffet said that if the tax cut passes, he would be paying a fraction of the tax rate paid by his secretary. Senator Jon Corzine of New Jersey quoted Buffett as observing that: "We may be having class warfare, but my class won."

A study by the Institute on Taxation and Economic Policy has concluded that 49% of the tax cut benefit will go to only the top 1% of earners in the US. This means that people earning more than $374,000 per year would save on average $11,500 as a result of elimination of dividend tax. Meanwhile, the remainder of the population would see a benefit ranging from $1,232 to $1 on average.

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