Skip to comments.Warren Buffett: Criticism is 'ridiculous' (His point is -- tax code treats his secretary unfairly)
Posted on 01/27/2012 11:24:04 AM PST by SeekAndFind
Warren Buffett's secretary, after being pointed out on national television during Tuesday's State of the Union speech, now is facing criticism over her salary and second home.
Debbie Bosanek and her boss both declined Thursday to disclose how much she's paid, saying it's private.
In an interview with The World-Herald, Buffett also said none of the online guesses about Bosanek's salary is right, and the critics are missing his point.
"I'm saying she is being treated unfairly in the tax code, as are tens of millions of others, compared to me," Buffett said. "They shouldn't change the rates on all the other people. They should change mine."
Buffett stuck to his long-held contention that it's unfair for high-income people to pay low tax rates, such as his own 17.4 percent in 2010, less than half Bosanek's 35.8 percent rate. That rate is for everything Bosanek pays to the federal government income taxes as well as payroll taxes for Social Security and Medicare.
Based on that 35.8 percent tax rate, Forbes blogger Paul Roderick Gregory wrote, "She is scarcely the symbol of injustice that Obama wishes her to project. I imagine that there are any number of secretaries who would want her job and her place in the Congress gallery for the President's State of the Union address."
Bosanek, he said, is being portrayed as a "downtrodden woman," but he estimated she makes between $200,000 and $500,000 a year, based on his assumptions about average income tax rates. Other Forbes bloggers disputed the figures, saying Buffett was quoted in the Times of London about five years ago saying he pays his secretary $60,000 a year.
Buffett said Gregory "doesn't have any idea, just zero. If I were to estimate his salary, I'd probably be closer than he is." You can't estimate salaries from tax rates, he said.
Buffett, the chairman and CEO of Omaha-based Berkshire Hathaway Inc., said the issue isn't Bosanek's income, nor is her tax rate unusually high. "They can't attack the facts, so they attack the person. It's ridiculous."
Bosanek said she's not complaining about her salary or the taxes she pays, nor will she apologize for the home she bought last year in Surprise, Ariz., a Phoenix suburb. One blogger announced that she made the purchase "despite a heavy tax burden."
"I just thought it was time to buy a home," she said. "Warren tells me that it will be the best opportunity in my lifetime. Mortgage rates are low and prices have dropped dramatically. Getting a nice home in a great climate for only a $30,000 down payment and a mortgage that has a low interest rate I've been working 37 years and saving for an opportunity like this.
"I share Warren's view about the future of America, and we believe that our country will do just fine. I'm happy to make this investment.
"Hopefully in 10 years, when I turn 65 and Warren turns 92, I will be able to convince him to finally retire so I can retire, after working 47 years, and spend some time where the sun shines in the winter."
Bosanek, while declining to give her salary, said: "I feel like I'm treated fairly at Berkshire."
She said she is neither the lowest-paid nor the highest-paid person among the 21 employees at Berkshire's Omaha headquarters. Their 2010 tax rates ranged from 33 percent to 41 percent, according to Buffett's calculations.
Bosanek said neither she or Buffett ever implied that she was poor or underpaid.
"It's not like I look forward to paying taxes," she said. "But I don't mind paying taxes as long as everybody's treated fairly. . I'm not saying anyone should feel sorry for me or lower my taxes. I never even thought about it until he wrote the article."
Buffett wrote an article last August in the New York Times, calling on Congress to change the tax code so high-income people pay at least as much as middle-income taxpayers and using his secretary as an example.
Obama proposed just such a tax change, calling it the "Buffett rule" and emphasized it in his address on Tuesday by inviting Bosanek to sit in the first lady's box during the speech.
"They needed to pick one person, and I was the lucky person they picked, or unlucky," Bosanek said Thursday.
She said she and her husband, Jerry, looked at houses last June when they took their son, also named Jerry, to visit at the University of Northern Arizona campus in Flagstaff, where he is now a freshman. Her husband drives vans and other vehicles for a company that delivers air freight from Eppley Airfield to destinations in the Midwest. Her father was an Omaha firefighter.
The Bosaneks bought the four-bedroom house in Surprise last summer for $144,000, making a $30,000 down payment and taking out a mortgage on the rest.
In Bellevue, the Bosaneks live in a slightly larger house southeast of South 25th Street and Fairview Road, close to the Tregaron Golf Course. They bought it in 1999, paying $231,274. The tax value is now $217,716.
The Surprise house has a pool, as do many others in the area, and the side yard has an artificial turf putting green with four holes, which was installed before the Bosaneks looked at the house. They spent Thanksgiving weekend there.
"We just had a ball. It was very special for us," Bosanek said, giving their son a break from campus life and staying in their own house and not a hotel.
Bosanek said she is not used to being in the public eye but doesn't mind being used as an example because she agrees with Buffett's views on taxes.
"I'm not whining. I just want to set the record straight," she said. "I'm very lucky. I've got a wonderful job. I work for a wonderful person. I have a wonderful family, and I have a wonderful home in Bellevue and I've got this wonderful new home that, hopefully, I'll be able to pay off someday."
-- The Omaha World-Herald Co. is owned by Berkshire Hathaway.
Instead of raising taxes on millionaires, why not lower the taxes on the rest of us?
—His point is — tax code treats his secretary unfairly—
Message to Warren: Yeah, we get that. We just disagree with you.
So instead of jacking up the rates on those who are prosperous, how about reducing the rates for people like his secretary. What is a fair rate ? A simple flat 10 or 15 % In fact 10% is a very fair number. It is good enough for God, it is more than good enough for the gov’t. Flat tax with no deductions except a certain exemption of income before tax is applied. Throw out the whole complex tax code and it would be a simple sheet of paper.
Taxes should be for revenue, not for social engineering.
Hussein and Buffett can criticize and use a lower level employee (whom Buffett could assist financially in any way he likes) as a prop, but when SOMEONE ELSE decides to analyze the fact that she owns two homes and likely makes up to $500,000 a year, well that is (ACCORDING TO HUSSEIN AND BUFFETT APPARENTLY) “ridiculous”, eh?
Hey Warren what would you do if Obozo put a 30% tax on all your income regardless of its source? Would you be making investments that entail risk knowing that 30% of whatever you made in capital gains would be taxed at 30% on top of the 33% federal corporate income tax that comes right off the top of a company’s profits? My bet is Buffet would be moving his money offshore in short order.
He isn’t opposed to eliminating loop holes.
Recovering_Democrat — you have it exactly right. Add to that the fact that Buffett and his organization owes a billion in back taxes and is fighting it and Buffett becomes the ultimate hypocrite. But then, what else do you expect, he is a democrat
i wonder if their son will get in-state tuition since mom and pop bought their 2nd house there in Arizona?
Blowback is a bitch, ain’t it Warren.
My version of the Buffet rule is that all Berkshire Hathaway investors pay the normal 15% capital gains tax, plus a special 65% “secretary tax”.
So, his secretary owns TWO homes, and he wants people to see her as being treated unfairly? I own zero homes, but I’m not complaining that the “Rich” do not pay enough in taxes. The argument isn’t about whether this group or that pays too much or too little. The argument is that the GOVERNMENT squanders what they take in revenue. The argument is that the GOVERNMENT places too many regulations and restrictions upon people who run small or large businesses, stiffling job creation. The argument is that the GOVERNMENT has become too wieldy, attempting to control ALL aspects of EVERYONES lives. The argument is that GOVERNMENT is the problem.
He's not only a world class rich guy - He's a world class hypocrite.
What he said.
Poor dummy, he puts his secretary in the national spotlight and cries when the light is shined on her
Is that her total tax rate or her marginal tax rate?
If it is her total tax rate and assuming she is married filing jointly with Nebraska income tax and SS+Medicare up to 106,000 and only Medicare above that, I come up with a pay of about $357,000. I ignored deductions and exemptions and any capital gains, even though she should have some. If those were included her income would have to be even higher to get to 35.8% total income and payroll taxes. I also didn't count the employer's half of social security. Either way, she is right about at the bottom edge of the eeeeeeeeeeeeeeevil top 1% of income earners, and I dislike how she is being used as a political bloody shirt comparing the income taxes paid by a 1%-er against a the capital gains of a 0.001%-er.
and then give them less....less services, less Medicare...less SS....
why doesn't Warren pay off his company's $20,000,000,000.00 tax bill, as I recall...
Buffett is such a hypocrite. He is currently fighting the IRS in court over taxes owed and he takes only a 100,000 salary. Precisely to minimize his taxes.
Basically, it's line 60 (tax) + SS+Medicare taxes paid (the full 14.2%) / line 43 (taxable income -- not AGI).
Which is to say all the huffing and puffing boils down to him not paying SS/Medicare on the 60 million in capital gains and dividends.
Well, that and the 14.2% ss/medicare tax is applied before any deductions and credits so an individual with a $100,000 salary, $14,200 in FICA taxes, $85,800 in deductions (that's a lot of kids) and $1,500 in income tax has a 110% tax rate, according to his "math".
Worth noting -- as of 2013, there's a 3.8% medicare tax on investment income in excess of $250,000.