Warren Buffett: Paying Income Tax
on Saturday, November 12, 2022Meaning of Warren Buffett Money Quote: saying those paying taxes are not taxed on capital gains, dividends. Warren Buffett said:
“We’re paying maybe 25 percent of the income tax, but the payroll tax is over a third of the receipts of the federal government. And they don’t take that from me on capital gains. They don’t take that from me on dividends” — Warren Buffett
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Warren Buffett is referring to how capital gains and dividends are taxed at lower rates than regular income for most taxpayers. When someone sells an investment like stocks or real estate for more than they paid, the profit or “capital gain” is taxed. However, the capital gains tax rate is typically lower than the rate for ordinary income.
Dividends from stock investments are also usually taxed at a lower rate than regular wages or self-employment income. By pointing this out, Buffett is suggesting that the tax system favors investment income over earned income through work.