In honor of Tax Day, April 15th, being last week I want to share an interesting tidbit on one of the wealthiest men in America:
Warren Buffett pays less tax percentage-wise than you do and he knows it. How is this possible, you ask? Because he earns a massive amount of money on dividends that are taxed as long-term capital gains, at the fire sale rate of 15%. Short-term capital gains on the other hand, which are profits you make on stocks, options, etc., that you hold for less than a year, are taxed as normal income on top of whatever you earn at your job. Your marginal tax rate is probably in the 20% range, which can easily put you in the category of people who pay a higher average tax rate on their income. Hell, even Buffett’s secretary gets taxed more than he does (again, by percentage).