Warren Buffett

Warren Edward Buffett (born August 30, 1930) is a wealthy American investor and businessman. Nicknamed the "Oracle of Omaha", Buffett has amassed an enormous fortune from astute investments, particularly his company Berkshire Hathaway, of which he holds more than 31% as of 2005. With an estimated net worth of $40 billion as of 2005, he is ranked by Forbes as the second-richest person in the world, behind Bill Gates.

Views on taxes

Estate Tax

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Buffett told The New York Times that the estate tax played a "critical role" in promoting economic growth, by helping create a society in which success is based on merit rather than inheritance. Repealing the estate tax, he said, would be equivalent to "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics."

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Dividend Tax

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When the United States Senate planned for dividends to be 50 percent tax free in 2003, then 100 percent tax free in 2004 through 2006, Warren Buffett wrote an opinion piece in the Washington Post saying it would "further tilt the tax scales toward the rich".

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Instead of the Senate's tax cut plan, Buffett proposed that it provide tax reductions to those who need and will spend the money in the form of a Social Security tax "holiday" or a tax rebate to lower-income people.

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Buffett posed a hypothetical situation in which Berkshire Hathaway, which does not currently pay a dividend, paid $1 billion in dividends next year.

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His 31 percent ownership would give him an additional $310 million in income (tax free). This would reduce his tax rate from about 30 percent to 3 percent, while his office secretary would still have a tax rate of about 30 percent.

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"The 3 percent overall federal tax rate I would pay -- if a Berkshire dividend were to be tax free -- seems a bit light," Buffett wrote.

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"Putting $1,000 in the pockets of 310,000 families with urgent needs is going to provide far more stimulus to the economy than putting the same $310 million in my pockets," Buffett added.

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Property Tax

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Warren Buffett used his own properties to illustrate an example.

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His home in Omaha, Nebraska

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is valued at about $500,000

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and recent annual property tax was $14,401.

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His home in Laguna Beach, California

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is valued at $4.0 million

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and recent annual property tax was $2,264.

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Buffett said in the Wall Street Journal interview that taxes on his Nebraska home grew by $1,920 this year, while those on the California home rose by only $23, thanks to limitations on increases in property tax established by Proposition 13.

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"In effect, it makes no sense," Buffett told the Wall Street Journal, in reference to large differences in tax assessments by region.

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