Tax rich more but not me, say wealthy

By Elizabeth Ody

Warren Buffett's view - that the wealthiest should pay more in taxes - is right, as long as it's other rich Americans paying, according to a survey.

About 71 per cent of millionaires surveyed said they agree with Buffett, chairman and chief executive officer of Berkshire Hathaway, that the very wealthy ought to pay more taxes and give more to charity.

That included 49 per cent who said they're "not in the same league" as Buffett and the higher taxes shouldn't apply to them personally, according to the PNC Wealth Management survey.

"When we compare ourselves to somebody else, we always think that they should do more," said R. Bruce Bickel, senior vice president of PNC Wealth Management, whose parent company is the sixth-largest US bank by deposits.

The 555 respondents, each with investable assets of US$1 million ($1.24 million) or more excluding real estate, may be saying, "'I don't consider myself the ultra- wealthy, when I compare myself to a Buffett,"' Bickel said.

Buffett, 81, the world's third-richest person according to Forbes magazine, urged Congress in August to raise taxes on households earning more than US$1 million. About 236,883 households earned US$1 million or more in 2009, according to the US Internal Revenue Service.

Income-tax rates for top earners will rise to 39.6 per cent from 35 per cent in 2013 and rates on capital gains and dividends also may rise, unless Congress takes action.

The survey didn't ask what level of income or assets should trigger higher taxes, according to Alan Aldinger, a PNC spokesman.

About 41 per cent of those surveyed said they would change their investment strategy in response to an increase in taxes, and 24 per cent said they would reduce commitments to philanthropy.

Almost 70 per cent said they plan to increase charitable giving or give the same amount, and about 22 per cent have cut back or plan to donate less. About 27 per cent of respondents, who were surveyed in September and October, said they gave more than US$25,000 to charity in 2010, up from 9 per cent who reported donations of that size three years ago.

"People are beginning to say, 'In difficult times, those of us who have been blessed with financial wealth need to give back,"' Bickel said.

Taxpayers generally can't take deductions for charitable contributions of more than 50 per cent of their adjusted gross income, says the IRS.

About 71 per cent said they're much better off than their parents were at the same age, compared with about 10 per cent who said they expect their children will be much better off by the time they're the same age.

- Bloomberg

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production apcf04 at 23 Oct 2014 20:02:15 Processing Time: 472ms