Thursday, January 26, 2012

About Warren Buffett's Secretary

One of the token throwaway lines from President Obama's campaign style speeches on reforming the tax code - by reforming, I mean increases taxes - towards the most successful in our country is one in which he declares that Warren Buffett's secretary pays her income taxes at a higher rate than Buffett himself does. Clever, right?

Clever. Yes. First of all, there is the characterization of Debbie Bosanek as Buffett's "secretary". Today, the term commonly used for women like her is "executive assistant". The term secretary conjures up visions of cheap metal desks in cubicles, including PBX machines. I know. I was there, back in another life. Now, however, the upscale version of that old job is a bit more respectful for those performing it. Better title, more perks, flexibility, etc. Not for all, don't get me wrong, but for many. I'm assuming that Ms. Bosanek is quite comfortable in her position. So, it's just another quiver in the Obama class warfare pack to use the term.

According to Forbes Magazine,it is likely that Ms. Bosanek makes a minimum of $200,000 and maybe up to $500,000 per year. How did the magazine's writer come up with this assumption?

Insofar as Buffett (like Mitt Romney) earns income primarily from capital gains, which are taxed at 15 percent (and according to Obama need to be raised for reasons of fairness), we need to determine how much income a taxpayer like Bosanek must earn in order to pay an average tax rate above fifteen percent. This is easy to do.

The IRS publishes detailed tax tables by income level. The latest results are for 2009. They show that taxpayers earning an adjusted gross income between $100,000 and $200,000 pay an average rate of twelve percent. This is below Buffett’s rate; so she must earn more than that. Taxpayers earning adjusted gross incomes of $200,000 to $500,000, pay an average tax rate of nineteen percent. Therefore Buffett must pay Debbie Bosanke a salary above two hundred thousand.

I don't know about my sister former secretaries but I never came anywhere close to making $200,000 per year. I didn't know of anyone else making that, either.

Maybe it is just another case of poor vetting by Team Obama. They have become known as fumblers in that department - it never fails that after President Obama uses an audience member as a prop for a point he is making in a speech to be discovered the next day that the story line is a fraud. Perhaps that is the case here, too. If not, then it is another case of Obama class warfare in an election year, with the twist of using a one percenter against the ninety-nine percent.

See, Warren Buffett is mega wealthy and his income is like Mitt Romney's - they live off investments made many years ago. The current tax code taxes that capital gains income at 15%. Plus, Buffett chose to donate a big ole chunk of his vast wealth to the Gates Foundation. So, there is some more tax break goodness for him. He is not a stupid man. Nor is he honest in his cry that the mega wealthy should pay more in taxes. Were he an honest broker in that plea, he would just voluntarily write a check to the national treasury and be done with it. Maybe, say, the amount he donated to Bill and Melinda Gates' foundation.

Just a thought.

And, if Ms. Bosanke makes that kind of money, more power to her. Her boss can well afford to compensate her handsomely. And the perk of attending the State of the Union address, sitting in the First Lady's box? Priceless.

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