In terms of raw dollars Warren Buffet pays way more in taxes than his secratary. In terms of marginal rate I am not sure how accurate Buffet's statement is. For example is WB got 100% of his compensation from capital gains then he would be taxed at a marginal rate of 15%. In this hypothetical let's assume his secretary makes 80 grand. Her marginal tax rate would be 20%. The reason is W-2 income is taxed according to IRS wage tables, and long term capital gains are taxed at a flat 15%. Now in terms of effective rate the statement is hogwash. The secretary in the 20% bracket probably has an effective rate of around 3% after her deductions and credits whereas Buffets effective rate is probably nearer to the 15% area. Deductions and credits have a much bigger effect on 80 grand than they do on 80 million. All of this is only considering federal income taxes. When you factor in social security, Medicare, sales taxes, property taxes, and state income taxes a much bigger percentage of the secretary’s income is eaten by taxes. My take on this is that we are all over taxed, and to the point that it is exhausting. Any tax reform that will be effective and equitable will have to consider all the types of taxes paid, who pays them, and the effects on the pocketbook. Congress is nowhere near smart enough to accomplish this. We will never see tax reform of any impact, and neither will future generations.
yes she pays a higher rate. that was the whole point. i dont know the numbers but hypothetically---- secretary making $90,000/yr income + $0 cap gains pays (subtract for exemptions) approximately 7% payroll tax = $6300 10% on first 10k = $1000 15% on next 25k = $3750 25% on next 45k = $11,250 total = $22k / 90k = 24% buffet making $200,000/yr income + $20,000,000 cap gains approximately 7% payroll tax = $6300 (just pay for first $90k approx) 10% on first 10k = $1000 15% on next 25k = $3750 25% on next 47k = $11,750 28% on next 90k = $25,200 33% on next 20k = $6,600 15% on $20,000,000 cap gains = $3,000,000 total = $3,049,000 / $20,200,000 = 15%
Supa is right on this one. The credits, deductions, etc under 100k really knock out a big part of the disparity Buffett talks about. His argument is about marginal tax rates but who cares. Effective is all that matters in the real world. And Gumbo....payroll tax??? You don't have Buffett down for payroll tax. He owns shares of Berkshire last I checked and I would imagine his ownership in that stock which creates the dividends also has tremendous payroll tax costs.
not all get many deductions. my mom used to make 50-70/yr in sales years ago, and got taxed like crazy because she didnt save, no dependents and didnt have loan interest to deduct. i put it there but forgot to add it to the total. so, 3,055,000/ 20,200,000 = 15% payroll taxes are just for the first 90k or so.
Even still there is a standard deduction, and a personal exemption, and with that plus credits, health insurance, retirement savings, flexible spending, and on and on the typical American has an effective tax rate of around 4%. I top out into the 25% bracket in good years, but the highest effective rate I have hit was 7%, and the only area where I deviate from average is retirement savings. I think it skews the argument in a poor manner. If you are going to include payroll taxes and maintain intellectual honesty I think you have to do a more detailed and typical look at deductions.
not really, warren wasnt talking typical, but a real person. that example has real value even if it isnt typical. but if you look at exemptions it should be done on both sides, which i imagine gets complicated on one side.
The point I was making was that payroll taxes are paid by both employers and employees. If you're going to count the employees payroll taxes, then you should look at the guy who employs thousands of people to understand what taxes he's paying in payroll taxes on for the portion of the company he owns.
I guess you could really throw the tax rate out the window. This just sounds typical of government. Our tax system is just as screwed up as Pelosi Care will be. Truly I don't understand how anyone can support government getting in the middle of any and everything except the radicals on the left. Seems like every thing is a cluster #@%&:grin: What are the chances that the secretary will need these services in the future but a rich fat cat won't because well, he is rich? I totally agree here and I guess this is where we part ways with Democrats especially the hard left people who support Saul Alinsky O I mean Obama. I'll never understand how a liberal will bring up Warren Buffet's argument which is deceiving to say the least. They will always want the rich to pay more even though almost half the population doesn't pay any income tax. It seems to me if you aren't rich you will need government services not the other way around so maybe his secretary should pay more when it comes to those services? Btw, Liberals don't like corporations or the way they pay their taxes, is it safe to say that everyone who owns shares in a corporation is rich? I don't think so? How do they propose to fix this problem? Or they just wanna bitch about capitalism and the country?
say what?:huh: if tax rates dont mean anything, why did you start: http://www.tigerforums.com/free-spe...ry-six-months-go-until-largest-tax-hikes.html
