A:

Warren Buffett's current opinion on taxation is apparently reflected in "the Buffett Rule," part of a tax plan put forth by President Obama that ensures millionaires and billionaires pay a minimum income tax rate of 30% or higher. Buffett questions why his capital gains tax rate of around 20% is a lower effective income tax rate than that of his secretary, or rather that paid by most middle class hourly or salaried income earners.

Consider Buffett's current financial condition in evaluating his stated viewpoint on taxation. As one of the two or three richest men in the world and well past the age of 80, having long ago established a mass of wealth that virtually no amount of future taxation can seriously dent, Mr. Buffett offers his opinion from a state of relative financial security that is pretty much without parallel. Even if, for example, every future dollar Warren Buffett earns is taxed at the rate of 99%, it is doubtful that it would affect his standard of living. Some analysts point out that Mr. Buffett was not so staunch and outspoken an advocate of aggressive taxation when he was considerably younger and first making his fortune.

Buffett's recent comments on taxation have helped fuel an already heated debate on the issue of taxes and the concept of "fair share." Investors are particularly concerned with the capital gains tax rate, which increased from a maximum of 15% to 23.9%. Adding in state capital gains taxes, the United States has one of the highest capital gains tax rates of any developed nation. Some economists consider capital gains taxes to present a form of double taxation, making raises in the rate even more controversial. Some countries do not impose any capital gains taxes at all, and countries such as Singapore have, therefore, become increasingly attractive to Americans seeking new citizenship in countries with less burdensome tax laws. Billionaire Facebook mogul Eduardo Saverin, who renounced his U.S citizenship in favor of Singapore, represents those well-to-do investors whose opinions on appropriate taxation differ significantly from Mr. Buffett's viewpoint.

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