Before you Listen to Warren Buffett 09/21/2011

Claiming that his secretary pays a higher rate of income tax than he does brings up a few points.

• Before Buffett gets any money at all, it has should have already been taxed at the corporate rate of 35%.

• Most of Warren’s income comes from capital gains that is taxed at 15%, while his employees are paying income tax on wages - not a fair comparison. 

• Other Buffet income would be from stock dividends, corporate officer draws, and other investment income which is taxed as income, but is not subject to payroll taxes - another tax saving advantage.

• Buffett has the option to reinvest all of the above income and write himself a paycheck instead.  That way he could no longer complain about not paying his fair share.

If the billionaire Warren Buffet pays a smaller rate of tax than his secretary, the only fair thing to do is reduce his secretary’s taxes, which could be done if Berkshire Hathaway would pay the back taxes it admits it owes the government from as far back as 2002.