Premium ContentMouse over Home then click on Premium Content for information.Moving from managing a hedge fund to managing money for Warren Buffett might seem like a dream for a professional investor.
But the switch carries a hefty price, Buffett said Tuesday, continuing his criticism of what he says are unfairly low tax rates for high-income people.
Specifically, Buffett said, the two Berkshire Hathaway Inc. money managers — Todd Combs and the one announced Monday, Ted Weschler — will be paying roughly twice the income taxes they owed while managing their own hedge funds.
"They'll be doing exactly the same thing," Buffett said — evaluating investment opportunities and deciding when and how much money to invest and when to sell off investments. Yet the federal code will tax their Berkshire salaries and bonuses at 30 percent or more, twice the 15 percent they would owe while managing their own hedge funds.
This week, President Barack Obama proposed making hedge fund managers pay higher taxes on some of their income, a provision he said would raise federal tax revenue by $18 billion a year. During last week's speech to Congress on the economy, Obama endorsed Buffett's criticism that the wealthy pay much lower tax rates than average wage earners.
Tuesday, Buffett returned to the issue — the subject of his New York Times opinion piece last month — in a brief interview after taking part in a dedication ceremony at the University of Nebraska Medical Center.
He said the higher tax bill that Combs and Weschler will owe under Berkshire "doesn't bother them one bit," repeating his belief that the wealthy are willing to pay higher taxes as part of the "shared sacrifice" the nation needs to fairly resolve federal budget problems.
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