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From WSJ on the Buffet Rule:  

 

Obama made quite a bit of hay with the Buffet rule in his SOTU address.   So far the numbers make no more sense than they do when they first came out months ago.   Obama’s first statement said that his secretary, Debbie Bosanek paid a tax rate higher than Warren Buffet.    He later said that she had paid more taxes than he did, a clear slip of the tongue perhaps meant to deceive, but never mind for the moment.   It is, after all, about politics and campaigning.  

 

With Buffet like Romney making his income off of capital gains, the 15% rate is levied on most form of his income.  It is pertinent to point out that there is another tax on corporate profits first (not taken on salaries for those are taken out before the profits are computed) before the capital gains are provided to him.    Some have argued therefore that Buffet’s effective tax rate is much higher than the 15%, or his 17.4% that he pays.    But wait there is more.

 

The average tax rate in the country of total income for his income level is actually a lot higher than 17.4%, close to 27% of total income.     This is the highest rate which is actually paid on average by those making the highest incomes, counter to what Obama has been saying for some time.   

 

Bosanek does not report her tax returns, as have others, and since there is so much riding on public sentiment shouldn’t she be compelled to disclose?   Furthermore is she paying 34% of her income in taxes as reported?   34% is the highest marginal rate that most are likely to see, so what does this mean?  It must mean she makes a lot of money.

 

Forbes has weighed in on the question in “Warren Buffett's Secretary Likely Makes Between $200,000 And $500,000/Year”, and excerpt from this Forbes article:

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 her  tax rate. This is easy to do within ranges.

 

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 Bosanek a salary well above two hundred thousand.

 

So what is she making and what is she paying?   To claim fair or unfair, full disclosure should be made here.   Is it fair to deceive?  Is it fair to confiscate more from any class, based on their class? 

 

But of course the issue is not her taxes or how much she makes.  The issues are spending and the need to reform the tax code into a fairer tax with some form of flat tax and fewer tax Gimees.   With all of the tax favors Obama promised during his SOTU address, it is clear he has no intention of reforming the code, but rather making it more complex and to his liking to reward those doing what he deems to be the best behavior.    Seems unfair right?