Friday, January 27, 2012

Did Warren Buffett's Secretary Pay Millions In Taxes?

I absolutely hate it when President Obama makes statements that can't be fact checked, one way or the other.  I practically spit up my drink on Tuesday night when he said this during his State of the Union speech:
Now, you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.
Of course he is referring to Warren Buffett and his secretary, who was seated in the First Lady's box and has become the poster child for the big, evil rich not paying their "fair share."

This may have been a misspeak, but I find it incredibly hard to believe that Warren Buffett's secretary paid less in taxes than he did.  She may have a higher tax rate, since his income may be majority capital gains.  But paid more in taxes in dollars?  No way.  The President repeatedly fails to discuss why capital gains are taxed lower.  It is because investments can be risky and they want to encourage people to make investments.  You could lose all of your money.  Also, nevermind that they money you are invested was likely already taxed the first time you earned it. 

Let's look at Mitt Romney, who also gets most of his income through capital gains.  He paid around $3 million in taxes last year.  Warren Buffett is worth way more than Mitt Romney.  The guy is worth billions.  I'd bet my life that he paid more than $3 million in taxes.  Buffett has publicly stated that he paid 19% of his income ($46 million) in 2006 in taxes. That's $8.7 million in taxes in 2006.  Are you telling me that his secretary paid more than that?  I seriously doubt it.  And if she did, then I really don't feel sorry for her, because she is clearly worth many, many millions of dollars.  Already people are trying to figure out what her income might be.  It wouldn't shock me at all to find out she is making $200,000.  She's been working for Buffett for a long time, and he is a rich man.  Good secretaries are indispensable to people like him.

Other than that, we can't fact check any of this.  Her tax returns are private, as are Warren Buffett's.  We will never know how much money in dollars he paid, versus how much money in dollars she paid.  Finding that out would ruin the rhetoric.  Can you imagine if people saw that she paid, say $40,000 in taxes and Warren Buffett paid $10 million?  That would destroy the story, wouldn't it?  So I will just continue to get infuriated that the President keeps marching her out as some kind of a symbol of class warfare.  Frankly, people like Mitt Romney pay enough in taxes.  Why should he pay $3 million and someone else pays $0?  How is that "fair"?

Anyway, that's all I have to say about the State of the Union address, other than that it was hilarious how President Obama kept using Ford's tagline "Built to Last."  Ford, of course, being a company that didn't require any sort of bailout from the government.

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