What he doesn't say is that much of his income was already taxed once as corporate income, which is assessed at a 35% rate (less deductions). The 15% levy on capital gains and dividends to individuals is thus a double tax that takes the overall tax rate on that corporate income closer to 45%.
The WSJ is pretty dishonest, in that they don't ever point out that 'less deductions' means that the corporate rate is effectively half the stated 35% rate, and in many cases reduces the tax burden to single digits or even zero. This changes their numbers significantly enough to invalidate their overall point.
True, but let's not stop there in pointing out the dishonesty. On this particular issue, the WSJ leads readers to think of only the poor corporations with their imaginary high tax brackets, but what about other investments? After all, the middle class has some access to stocks but what about those investments that you need a little more money to get into? Real estate gains are taxed at the capital gains rate while providing owners with depreciation credits to apply to what is generally an appreciating asset. Trading in futures, hedge funds, currencies, etc all avoid corporate taxes completely but you have to have some serious money to do that for real. Mr Buffet knows that and the WSJ doesn't seem to.
The middle-class bait-and-switch. Like Mr. Obama, Mr. Buffett speaks about raising taxes only on the rich. But somehow he ignores that the President's tax increase starts at $200,000 for individuals and $250,000 for couples. Mr. Obama ought to call them "thousandaires," but that probably doesn't poll as well.
Why would you call millionaires "thousandaires"? If you make >$200,000 in all but the most expensive sections of the country and you have been for a few years, your net is going to be over a million and you will already be reaping significant wealth growth from things other than direct income. Even someone making $100k/yr with prudent spending and savings could easily expect to retire as a millionaire. (For reference, if you start at $60K, get a 4% pay raise per year and invest 10% of your post tax income at 6%, you will have ~$1.4 million depending on tax rate after a forty year career.)
The charity loophole.For billionaires like Mr. Buffett, the single most important deduction in the tax code is for charitable giving. Middle-class earners can't give nearly as much money away to reduce their overall tax burden. Yet we don't hear Mr. Buffett calling for the elimination of that deduction in the name of fairness.
This is six of one, half dozen of another. He's proposing to raise taxes on the rich. How you do it doesn't matter. I wouldn't do it by getting rid of charitable deductions because that would only impact some of the super rich instead of hitting all of them uniformly, but this is a silly argument anyway. Those smart rich philanthropists are not giving away three dollars to get one back from the government. In fact, this is another place where the rich can easily get around the rule and get the tax break anyway while the less wealthy are out of luck. Corporate donations are always tax deductible, so the rich just work the system by having a corporation donate the money for them. I'm sure Buffet doesn't care if Berkshire Hathaway's name is on the donation form instead of his. I would favor giving a 15% credit for charitable contributions instead of a deduction so all income brackets benefit equally, but that is another thread.