Billionaire investor Warren Buffett defended Mitt Romney's tax rate on Monday.
Buffett, who has been a vocal proponent of the Obama administration’s proposed “millionaire’s tax,” said it's natural for Romney to leverage the tax code to his advantage if Congress provides the opportunity.
“It is the wrong policy, nothing wrong about him doing that. He will not pay more than the law requires,” Buffett told Bloomberg Television. “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."
Romney has been under intense pressure to release his tax returns, and has been skewered by his rivals for his perceived waffling on whether he will do so. He said on Sunday that he will release his 2009 and 2010 tax returns on Tuesday night.
The former Massachusetts governor has previously estimated that he pays about 15 percent in federal income taxes.
Fifteen percent is the tax rate for long-term capital gains on investments. Buffett argues that because that’s the primary source of income for some wealthy investors, it should be taxed at the same rate as average American workers pay — around 35 percent.
“My general theory is you should have a tax system where those making millions and millions of dollars, who are paying a much lower rate for one reason or another, get moved up to the rate that people think they are paying, in the mid 30s,” he said. “There are about 80,000 taxpayers within that group paying that lower percentage of taxes. I would move those people up — one of whom is me and another is Governor Romney. Move them up to the mid 30s where most of the people are.”
Romney has also been under fire from his rivals for his time as an executive at Bain Capital. Before he dropped out of the race, Rick Perry called him a “vulture capitalist,” while Newt Gingrich accused him of picking companies clean and laying off workers for the benefit of his own company’s profit.
Gingrich has also argued that there is a moral argument against what Romney did, but Buffett dismissed this notion.
“Romney did a lot of things in the private sector that are perfectly legitimate,” he said. “I do not like buying businesses with lots of debt, but there is nothing immoral about it. In some businesses, they hired more people, in others they let people go … I see nothing specific about him. I think his tax rate is too low, but that is the fault of Congress, not his fault."
“[Romney] makes money the way I do,” Buffett continued. “He makes money by moving around big bucks, not by straining his back and going to work, cleaning the toilets or whatever it may be. He makes it shoving around money. I make it shoving around money. If you look at the 400 highest incomes in the United States, the average is $220 million, something like 90 of them are effectively unemployed. They have no earned income, and that number has gone up over the years. That will not solve the budget deficit, what I'm talking about. The truth is, I am paying a tax rate less than when I was making $15,000 a year.”
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