From Guardian UK:
Buffett, a long-time critic of the US tax system, has calculated that he handed over 17.4% of his income as tax last year – a lower proportion than any of the 20 other people who work in his office.
Here's the simple story with the tax rate and the rich (and even not so rich):
You have your salary and you have your share of profits (capital gains) from a company you own. With a Corporation, whether C or S, company profits are taxed at 15%. For those who aren't familiar with this, that is what most of these folks are talking about when they discuss salary. As a business owner, I take a percentage in salary (taxed at 33%) and a percentage as company profits after expenses (15%).
The flexibility corporation owners have in setting their own salaries is wide as long as they have the proper deductions. Nonetheless, those who make several million in profits (as Buffett describes) I would expect are taking AT LEAST $250,000 in actual salary. If you take a look at profit breakdowns for CEO's on Forbes site you'll see what enormous incomes these guys have IN ADDITION to their actual on-the-books salaries.
Here is my suggestion. If you have, say, profits of 1.5 million, you MUST take at least a third in salary - so someone making 1.5 would have to take $500,000 as an on-the-books salary. Then THAT salary above $500,000 can be subject to the increase in income taxes from 35% to 39% (or 40%. Nickles and dimes). People in this bracket can well afford the increase, it doesn't threaten the vast majority of small business owners who take capital gains (and in this economy, sometimes can't pull a salary), and refutes the argument that such a change would threaten businesses. As well, by the last quarter of a year most businesses will KNOW what that profit margin will be and all the tax department needs to do is allow them to make up the difference in the last quarter.
For small business, who don't make several million and would very likely not be taking an on-the-books salary of $500,000, there would be no change. For employees who make less than $500,000 there would be no change. The only one's this tax system would change for are those who can well afford it and those with salaries of $500,000 or more at companies (lets face it. If you're making half a million in salary and not a partner in profits, well, you're a pretty fucking lucky employee).
Nonetheless, the right will find some useless, false, ugly, cynical way to suggest that an increase based on this kind of structure would "lose jobs", but as Buffett suggests (and anyone who is a business owner or investor knows) extra taxes will not force you to shut down your business.