To: Jim McMannis who wrote (625361 ) 8/21/2011 2:13:05 PM From: tejek Read Replies (1) | Respond to Seems I was right.............still doing it. Why Buffett only pays 17.4% of his income in federal taxes: "Last year my federal tax bill ... was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income -- and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent." Millionaires who pay no income tax Unlike most Americans, Buffett and the country's wealthiest taxpayers make much of their income from investments . The capital gains and dividends those investments generate are taxed at a much lower rate than wages. Long-term capital gains and dividends are currently taxed at 15% -- well below the 35% top income tax rate.Managers of hedge funds and other investment partnerships, meanwhile, enjoy that same rate on the portion of their pay known as carried interest. In addition, the wealthiest only pay a very small percentage of total payroll taxes, which support Medicare and Social Security . That's primarily because the payroll tax only applies to wage income, not investment income. Come 2013, however, a Medicare tax will be added to a portion of the wealthiest Americans' investment income to help pay for health reform.
