In President Barack Obama’s State of the Union speech, he referenced Warren Buffet declaring that his secretary pays a higher rate of income tax than he does.
Well, if you just look at the second page of their 1040’s, this looks correct, but it’s really very deceitful.
If you own a share of stock and that share earns $1, before you get that distribution, 35 percent is taken by the federal government. When you get your, now 65 cents, it is taxed at a 15 percent rate.
This makes for an effective taxation of almost 45 percent.
If Warren Buffet’s secretary makes less than $200,000 per year, then according to the IRS, she would pay between 13 percent and 14 percent if she took average deductions.
Is Warren Buffet so stupid an investor that he is not aware of this? I think not.
Why would Warren Buffet make this obviously misleading statement? Would it be that first, he thinks that the American public is too stupid as to not see through his subterfuge?
And/or, second, that have accumulated a great deal of wealth, his ambitions have gravitated toward national power and he is trying to ingratiate himself with our president in his class war?
Another consideration is that Warren will benefit from the president’s canceling of the U.S.-Canada pipeline since railroads that he owns will carry oil that would otherwise flow through the pipes.
Don’t let Warren’s and the president’s sleights of hand fool you into a stupid and counterproductive class war.