I have been thinking carefully about the proposals by President Barack Obama and Warren Buffet that we raise the tax rates on high income individuals to solve the country’s fiscal woes. They talk about this in terms of asking the wealthy to pay their “fair share,” and use the often cited example of Warren Buffet paying an average Federal Income Tax rate of 17.5 percent compared to his secretary paying 33 percent.
From the very beginning, something has struck me as disingenuous about the Obama approach. While I am not a tax professional, I am a CPA and financial executive and do understand how to read IRS tax rate tables. I do not know Buffet’s secretary, but in order to be paying an average Federal Income Tax rate of 33%, the secretary would need to have Federal Taxable Income in excess of $900,000 per year. Somehow, Mr. Buffet and President Obama always seem to forget this inconvenient fact. They hold Buffet’s secretary up as the paragon of middle class virtue, but analysis of the tax rates indicate the secretary makes enough to be a “corporate jet owner.” That is just a dishonest and misleading use of partial data while withholding important and pertinent data.
So, in thinking about Buffet’s $900,000 per year secretary, it seems that the Obama definition of fairness is that extremely successful individuals with effective tax planning should be forced into paying the same tax rate as less well-off but still extremely successful individuals with less effective tax planning.
Personally, I have been fortunate to be blessed with a wonderful support system and an education that has allowed me to achieve financial success in my career. I realize that I benefit from a viable and stable society that continues to grow and provides a safe environment for my children. For that, I already pay almost 50 percent of my income in taxes–Federal and State Income, Sales Tax, Real Estate Tax, Social Security Tax, Medicare Tax, gasoline tax, etc. I am perfectly willing to pay those taxes for the right to participate in and benefit from American society.
However, I think it takes extreme hubris for Messrs. Obama and Buffet to suggest that my current tax bill is in some way not fair when over half of Americans pay no federal income tax whatsoever. For my part, I do not receive any government handouts — no Medicare, no Medicaid, no government pension. Social Security will be bankrupt by the time I retire if something is not done. Putting two children through college will require almost $800,000 of pretax earnings and we will qualify for a grand total of zero financial aid.
When I think about this, I realize that Obama’s definition of “fair” must be that those who already pay for almost everything should pay even more so that those who only take can take more.
— Todd Naughton, Buffalo Grove
