Warren Buffett is honest when it comes to his tax returns. The “Buffett rule” is a rule that states 30% of the effective tax rate for the wealthy. Buffett responded to criticism by telling the world that his adjusted gross income (AGI), in 2015, was $11,563,931. His federal income tax was $1,845,557. This is a tax rate of 16%. Buffett claims to pay a lower tax rate than that of his secretary, and this number is dependent on what his secretary earns, which means effectively that Buffett’s tax rate might be lower than his secretary. IRS allows individuals to deduct 50% of their earnings in AGI charitable contributions.
Buffett’s deductions could be in the amount of $5,781, 965, an ability to deduct more than the $3,469, 179 he actually took out. Buffett contributed more than $2.8 billion to charity in 2015. Buffett has paid taxes for 72 years and does not hide his tax returns. Buffett’s taxes did help the United States pay for World War II. Buffett plans to give away 4% of his Berkshire Hathaway stock shares every year. Buffett says he will never carry a deduction forward even if the IRS allows for charitable contributions above the 50% limit that is carried forward up to five years.
Rich people often get audited. Billionaires bring in more money than school teachers. Buffett has released his tax returns from 1944. The return shows that as a 14-year-old Buffett had earned $592.50 and $288 in interest and dividends. Or $8,211.18 in today’s money.