The Lies of Warren Buffett

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Ever hear billionaire investor Warren Buffett say that he pays less tax than his secretary? Does he really? Is our federal income tax code so unfair that a man with money to burn pays less tax than a does a minimum wage worker?

Consider this for a moment. If a single person makes $7.25 an hour, works 40 hours a week and works an entire year, he/she will have paid $1,159 in federal income tax. No small amount of money for someone who only makes around $15,000 a year. However, when that person files their taxes in 2020 for 2019, they can take the standard deduction of $12,200 which makes their taxable income only $2, 875 for the year. That person has more than overpaid their taxes for the year and now will see a refund of at least $872. Therefore, that worker only has an effective federal income tax rate of 1.91%

In contrast, an attorney for example making $125,000 a year having taken the standard deduction of $12,200 will have paid $14,631 in federal income tax and possibly still owe more on tax day. The attorney has an effective tax rate of approximately 12.9%

Making the situation even more interesting, suppose the minimum wage worker has a child and is single? Because of the child tax credit, that person could now see a refund of their entire federal income taxes paid, AND see an additional $1400 due to the child tax credit.

Yes, you read that right. That person can owe no taxes at all, and still get more than a full refund by over $1,000.

Given Buffett's ownership in Berkshire Hathaway (33.9%) and the $4,760,000,000.00 in federal income tax the company paid.....well I am sure you get the gist. Warren pays a ridiculous amount of income tax on his earnings and seriously, if he wanted to pay more, there is nothing stopping him.


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