Berkshire Hathaway CEO Warren Buffett gave his opinion on the ongoing pressure for Republican presidential candidate Mitt Romney to release his tax returns Monday.
Mr. Buffett appeared on Bloomberg Television Monday alongside U.S. Rep. Scott Rigell, a Virginia Republican.
Mr. Rigell responded to Mr. Buffett’s challenge in Time Magazine recently that he would match donations by Republican members of Congress that offered portions of their salaries to go towards the national debt. Both men will make checks out to the U.S. Treasury in 2012 to go towards reducing the federal deficit.
The celebrity investor said he is willing to make more donations if more members of Congress are.
“If out of 435 in the House, the additional in the Senate, if 50 of them would do it, I would. 10% of Congress, sure,” said Mr. Buffet Monday.
During the interview Monday, Mr. Buffett also took issue with Mr. Romney regarding his tax returns and the income tax rate paid by the Bain Capital co-founder. Mr. Buffett raised the issue of disproportional tax rates with an op-ed article in The New York Times in August, claiming that he pays a lower tax rate than many of the people who work for him.
Mr. Buffet pays a lower rate, because like Mr. Romney he is taxed at the 15 percent capital gains tax rate, which is much lower than what average middle Americans pay in income tax rates that are up around the 30 percentile range.
Mr. Romney’s Republican rival candidate Newt Gingrich has pressured him in recent weeks to release his tax returns, in an attempt to characterize him as a wealthy businessman who is out of touch with the voters that he is trying to win over. The former Massachusetts governor has refused to do so, but last week stated in an interview that he pays taxes of “probably 15 percent,” which increased media scrutiny over his tax returns.
The Berkshire CEO said he blames Congress and not Mr. Romney himself for paying a lower tax rate.
“He makes money the way I do. He makes money by moving around big bucks, not by straining his back and going to work,” said Mr. Buffet Monday. “Nothing wrong about him doing that. I do not fault him for that in the least, but I do fault the law that allows him and me, earning enormous sums to pay over all federal taxes at a rate that is about half what the average person in my office pays.”
In the fall of 2011, President Barack Obama submitted a deficit reduction plan to Congress that featured a “Buffett rule” that would increase taxes paid by Americans earning more than $1 million per year. In reaction to the president’s plan, Mr. Buffett said that the proposed “millionaire’s tax” should only apply to the “ultra rich.”
On Monday the Nebraska based investor said that he doesn’t believe either Mr. Romney or Mr. Gingrich’s proposed changes to the tax code would actually be signed into law if either of them became president.
Mr. Romney’s plan according to his presidential website, is to keep individual tax payer rates “marginally the same,” while lowering the corporate tax rate from 35 to 25 percent. Mr. Gingrich proposes lowering the corporate tax rate to 12.5 percent while making the reduced 2010 payroll tax rate permanent.
“There is history that shows campaign promises to not end up being law,” said Mr. Buffett, who added that he does not believe Mr. Romney’s decision refusing to release his tax returns will be a major factor in him becoming the Republican nominee in 2012.
“Romney hurt himself. He did not have a good answer on taxes, but it will not be the determining factor on who will be president,” said Mr. Buffett.
