Did Obama Pay a Lower Tax Rate than his Secretary?
Using some speculative mathematics, Keith Koffler asks: Did Obama Pay a Lower Rate Than His Secretary?
Now, setting aside the question of whether the numbers are accurate (it is nearly impossible to know what someone paid in income taxes by simply taking a salary and applying marginal rates), I don’t think this situation means what Koffler thinks it means.
He (as do his commenters and Protein Wisdom’s Jeff G.) treats this as some sort of Gotcha! Moment (or an example of hypocrisy or irony). However, wouldn’t such a revelation actually underscore Obama’s argument regarding the so-called “Buffet Rule” i.e., that the tax code is so screwed up that there are incidences of persons making substantially more than their underlings and yet the underling pays a higher tax rate?
How is this a gotcha?
This strikes me as a case of people trying to find a slam without thinking through the implications of what they are saying.
Conservative pundits with a knee-jerk reactions to half-understood facts? I’m shocked.
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@Gold Star for Robot Boy:
Yeah. Good thing it isn’t standard operating procedure for liberals or anything.
Careful, Steven, or someone might accuse you of lurching too far to the left as you shill for the President…after all, it is just so obvious that this blog isn’t the conservative bastion it once was…
I don’t understand the “gotcha”.
Obama always casts himself as one of the 1%…people who should be paying taxes commensurate with the benefit they receive.
In addition if you look at the numbers he is actually falling out of the 1%.
Until he writes another book…presumedly a how-to about transforming democracy into socialism.
Not surprisingly I have a completely different take on this issue, for the simple reason that for my entire working life I’ve rejected the concept in the first instance of “graduated” income tax rates. Why should a person who earned $750K pay a higher rate than a person who earned $50k? The former paid a helluva lot more dollars into the Treasury than the latter. Isn’t that the relevant issue? No matter how you massage the marginal rates those in the very highest percentiles of earned income by leaps and bounds are providing the government with vastly more money.
The other angle here is the fallacy of various line-item deductions, most notably the deduction for charitable contributions. I’ve never agreed with the notion of the government via tax policy trying to steer behaviours that don’t directly relate to economic growth, capital investments and job creation. Doing so creates distortions in the marketplace that don’t improve the bottom line. Giving to charities should be a personal decision of the heart, not a government-sponsored tax avoidance device.
If we have to have a federal income tax why not have one single tax rate for everyone other than the truly indigent? A true flat tax. No deductions. No exemptions. No loopholes. A broader base of federal revenue with a much lower tax rate. To me that’s a lot “fairer” than the train wreck of a tax code with which we’re currently saddled.
@Tsar Nicholas II: One presumes that any discussion of income taxes could allow one to have the discussion you are referring to here. I am not sure how this particular situation leads to a special gotcha or incident of grand irony for Obama.
Why shouldn’t that person pay a higher rate?
No chance…
That’s because, of course, this situation doesn’t lead to either thing…
Here’s the irony for Obama and Buffett: the Treasury Department is set up to accept willful overpayment of taxes. In other words, if you feel you should pay more in taxes, you can just give them more money, and they’ll take it.
Obama and Buffett’s attitude seems to be “we believe we should pay more in taxes, but we won’t pay one damned dime more than we absolutely have to unless you not only make us, but make everyone else in a similar position — regardless of their opinions on the matter..”
Similarly, “I shouldn’t drink to excess, but I won’t stop until there’s a law saying no one can get stinking drunk.” Or “I know I shouldn’t speed, but I’ll go as fast as I want as long as there’s one guy out there going just slightly faster.”
Whatever happened to leadership by example? Wouldn’t it be a marvelously grand and compelling gesture if Obama and Buffett actually declared what they think they should pay in taxes, then paid it? Then they could shame their financial peers into doing the same. After all, Obama’s got that bully pulpit, and Buffett can have all the media access he wants…
This just begs the question: Why the hell didn’t he check with his Secretary before he filed his taxes?
$789 thousand dollars.
Does anyone suppose this will get him labeled as part of the 1%?
No, I don’t think so either. And where did that income, come from? After all the man has never worked a private sector job his entire life.
@Eric Florack oddly enough, it did even in this comment thread: @click.
Yes, he is in the top 1% and this is an objective classification that no one is disputing to my knowledge.
BTW: his book revenues would qualify as “private sector.”
@An Interested Party: Let’s fudge the numbers a little, just to make the math simpler. Say Obama made 800K, while his secretary make 50K. And let’s assume that Obama specifically told his accountants to NOT minimize his tax liabilities, like most people do, and his exact taxable income was precisely 16 times hers. So he ends up paying $16 for every dollar she does in taxes.
You want him to pay more? Why is some abstract concept called “percentage” so much more important than the actual dollar bills?