This is a comment I posted on Paul Gregory’s Forbes post about Mr. Buffet’s Secretary’s salary– saying that for her to be paying less than him (assuming a 15% rate) then she’d have to be making over $200k, meaning she’s not such a poster child for injustice after all. (I guess God only has pity for those making more or less than $200-500k?)
There is some confusion as to whether you’re talking about percentage of AGI, how much Mr. Buffet actually pays, whether to include other taxes besides Federal payroll tax, etc. My comment speaks to that and to what I believe most Americans feel is fair.
Paul, when I put my modest salary into TurboTax’s free tax calculator (I have no special situations or deductions, just a single guy) it comes back with me owing 16% to the Federal Government. That doesn’t include state tax, social security, 401k, insurance, or any of the other things that come out of my paycheck, which when added up come closer to 30%.
Americans have always wanted a sense of basic fairness, the no-nonsense end-of-the-day gut check. If the government takes less than about 30% of Mr. Buffet or Mr. Romney’s “paycheck” every month, that offends a basic sense of decency.
I’m a hardworking guy who manages the occasional roadtrip or vacation, and I’m way luckier than most. But I always tip 20%, and although taxes are a bastard, I’d gladly pay more tax if that meant less tax for those struggling to put food on the table.
10% more on my taxes means maybe I vacation in Hawaii instead of Japan. 10% more on my employee’s means the difference between buying a house versus renting, or buying a car versus keeping his clunker running, and again– he’s got it better than most. That a multi-millionaire couldn’t afford a 10% tax increase strikes me as ludicrous, because I CAN.
Footnote: it’s entirely likely that everyone who makes more than me pays a higher percentage in taxes than me. If so, then that’s fine. But if not, if there are huge loopholes and tax shelters and special treatment for people who can afford to live much nicer than me, then again that offends a basic sense of decency.
One thought on “Death and Taxes”
Hey Will, you need to ensure are taking the standard deduction (no itemizing), which should dramatically reduce your effective tax rate. Last year I paid ~9% and I don’t have any secret sauce either. The $200k threshold is about right, give or take.