You're thinking of other taxes that go with it. Payroll, state, etc. I'm talking only about federal income tax. It is impossible.
You would have to have an AGI in excess of $2.5 Million in W-2 income to have an effective rate of 34%. We are probably talking gross earnings in the $3 million dollar range. Here is the math: Gross Earnings Tax Owed Marginal rate Effective Rate 17400 1740 10% 53300 9735 15% 72000 27735 25% 74750 48665 28% 170900 105062 33% 2111650 844139.5 35% 33.77% $ 2,500,000.00 Do Not foot So Buffet lied. He compared his effective rate to her top marginal rate. On the other hand, you are right. She would have to earn a salary well above $200,000, like ten times it.
The only example I could think of is an elite professional athlete who makes millions of dollars a year, and does not take part in any type of tax avoidance.
explain to me as if i am stupid how buffet is lying. i dont understand tax codes and shit i have a guy who does it all for me. i know i am asking you to tell me things i could google myself, but i would appreciate it anyways.
Pretty simple really. As Supa pointed out, you cannot pay 34% federal income tax unless you make millions of dollars. His point was that someone who makes as little as his secretary pays twice the % of taxes as he does. He derives his income from long term capital gains and dividends which are taxed at lower rates. This is Buffett's argument for why the rich are undertaxed. This may be the case, but his example is a lie. I actually disagree with Supa because I don't think he's taking her marginal rate against his effective rate, I think he's lumping in payroll taxes, state taxes, and perhaps even extrapolating sales tax to come up with his number.
i know what warren says. why is it not true? is he lying about what he pays, or what his secretary pays?
It seems likely that he is lying about what his secratary pays. To pay an effective rate of 34% she either would have to make a fuck ton of money, in exess of 2.5 Million, or he would have to include several different types of taxes, like federal income tax, state income tax, payroll tax, etc. He didn't give the details of his analysis, but he indicated he was comparing similar things, when that cannot possibly be so.
