Warren Buffett demands to pay more tax

Mr Buffett said he had never known anyone to shy away from an investment because of high taxes

Warren Buffett has called for Congress to make him and his "mega-rich friends" pay more income tax.

In a piece in the New York Times newspaper, the billionaire investor and philanthropist said the rich should do more to help plug the deficit.

He called for a tax rise for those earning more than $1m (£600,000), and a higher rate for those on over $10m.

In a rebuttal of arguments made by Republicans, he said tax rises would not hurt investment or jobs in the US.

He told Congress to "stop coddling the super-rich".

"Our leaders have asked for 'shared sacrifice'," he wrote. "But when they did the asking, they spared me."

Challenge to Congress

Mr Buffett explained that, like many top earners, his income came entirely from investments rather than from employment, which are subject to lower taxes in the US.

He said last year he paid an effective tax rate of 17.4%, less than the 33% to 41% paid by the employees in his office.

He dismissed arguments made by senior Republicans, including John Boehner, speaker of the House of Representatives, that taxing higher earners more would damage investment and job creation in the US.

"I have yet to see anyone... shy away from a sensible investment because of the tax rate on the potential gains," he said.

He pointed out that the effective tax rate paid by the highest earners was much higher in the 1980s and 1990s than in the last decade, and yet job creation was much higher in the earlier decades.

His proposed tax rises would not affect 99.7% of taxpayers, he claimed, adding that a 2% payroll tax cut passed in December should stay in place to help the poor and middle classes.

However, Mr Buffett also set a challenge for the Democrats who are set to form a special Congressional committee with Republicans to agree $1.5tn in budget savings.

He said "job one for the 12 [committee members] is to pare down some future promises that even a rich America can't fulfil".

While Republicans have been implacably opposed to tax rises, Democrats have been loathe to cut healthcare and social security benefits that some economists claim will become unaffordable as Americans live longer and baby-boomers retire.