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Fri Jan 27, 2012, 03:49 PM

 

Here's the bogus Forbes article that's lighting up the right-wing blogosphere

and here's the rebuttal:

http://www.forbes.com/sites/paulroderickgregory/2012/01/25/warren-buffetts-secretary-likely-makes-between-200000-and-500000year/

Warren Buffett’s secretary, Debbie Bosanek, served as a stage prop for President Obama’s State of the Union speech. She was the president’s chief display of the alleged unfairness of our tax system – a little person paying a higher tax rate than her billionaire boss.

Bosanek’s prominent role in Obama’s “fairness” campaign piqued my curiosity, and I imagine the curiosity of others. How much does her boss pay this downtrodden woman? So far, no one has volunteered this information.

We can get an approximate answer by consulting IRS data on tax rates by adjusted gross income, which would approximate her salary, assuming she does not have significant dividend, interest or capital-gains income (like her boss). I assume Buffett keeps her too busy for her to hold a second job. I also do not know if she is married and filing jointly. If so, it is deceptive for Obama to use her as an example. The higher rate may be due to her husband’s income. So I assume the tax rate referred to is from her own earnings.

. . .

Buffet himself declares that he pays a 17.4 percent rate on taxable income. His staff, like Bosanek, pay an average of 34 percent. The IRS publishes detailed tax tables by income level. The 2009 results show that the average taxpayer paying Buffet’s 17.4 rate earns an adjusted gross income between $100,000 and $200,000. But an average taxpayer in Bosaneck’s rate (after downward adjustment for payroll taxes) earns an adjusted gross income of $200,000 to $500,000. Therefore Buffett must pay Debbie Bosanke a salary well above two hundred thousand.

******

Did you catch the weasel word there, folks? It's average. If you walk through a 20 foot stream that is exactly two feet deep, the average depth is two feet. However if you walk through a similar stream that is 20 feet deep for a width of four feet and one foot deep the rest of the way, the average depth is only 1.2 feet.

Which one do you want to cross? The stream that is two feet deep or the one that is "only" one point two feet deep?

The Forbes article reflects data of "average" taxpayers who may have a lot of investment income, just like Rmoney. This would pull the "average" tax rate far lower than it really is on MOST taxpayers in that range.

So, it's a bogus way to look at Buffett's secretary's income.

******

Here's the simple truth--

If Buffett's secr'y makes 75 K a year, files singly, and only takes the standard deduction of 5,800 dollars + the exemption on herself (1) 3,700, she pays taxes on 65,500 dollars. The tax on that amount is 12,506 dollars.

Divide that tax by 75K, and you get a tax rate of 16.6 percent.

Rmoney makes over 20 million a year and pays a tax rate of 13.9 percent.

It's pretty simple math, really, and it shows that what Buffett and Obama said is exactly right.

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Reply Here's the bogus Forbes article that's lighting up the right-wing blogosphere (Original post)
mistertrickster Jan 2012 OP
ChairmanAgnostic Jan 2012 #1
ret5hd Jan 2012 #2
ChairmanAgnostic Jan 2012 #4
mistertrickster Jan 2012 #3

Response to mistertrickster (Original post)

Fri Jan 27, 2012, 03:51 PM

1. don't your shoes get wet in either stream?

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Response to ChairmanAgnostic (Reply #1)

Fri Jan 27, 2012, 03:54 PM

2. maybe...but in which one does your hair get wet?

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Response to ret5hd (Reply #2)

Fri Jan 27, 2012, 04:22 PM

4. depends on the hair's location.

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Response to mistertrickster (Original post)

Fri Jan 27, 2012, 04:20 PM

3. Also, when Buffett points out that his staff pay "34 percent"

 

of their income in taxes, he's no doubt including Soc. Security and Medicare taxes -- the so-called "payroll taxes" -- which on a percentage basis are also extremely unfair to lower income people relative to the rich.

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