Bosanek has become something of the anti-Joe the Plumber in recent days because she is supposed to symbolize the downtrodden middle class worker who is getting jobbed on her taxes, especially in comparison to her boss. Bosanek is Warren Buffett's secretary and she and ol' Warren have been making the rounds in recent days, complaining about how unfair it all is.
As usual, there's more to the story. First of all, most executive secretaries make pretty good coin and I would imagine that Bosanek is no exception. A columnist for Forbes estimates that for Bosanek to pay the tax rate she claims to pay, she must earn well north of $200,000 a year. If this guy is correct, she might make closer to $400,000 a year:
If she’s really paying a marginal rate of 35%, she’s earning over $379,150 per year in taxable income, which places her in the top 1% of income earners nationally. If this is true, Ms. Bosanek is anything but an average citizen. An average citizen–say someone who earns the median salary of a secretary to a CEO, which is $67, 791, according to a 2011 survey conducted by Certified Compensation Professionals–pays a much lower effective tax rate on taxable income than Ms. Bosanek. Assuming this average citizen took about $15,000 in deductions, she would pay an effective tax rate of 17% on taxable income of $52,791, the same rate Mr. Buffett claims to be paying.
I would not be surprised if she did make that much. Buffett could afford to pay her that much and probably would, since a CEO's secretary typically has the same skill set as a department manager, or even director-level employee in most companies. As has been pointed out elsewhere, there's really no way to know if the assertions that Bosanek and Buffett are making are true unless they both are willing to release their tax returns.
My guess is that the 35% number actually counts the payroll taxes that go to FICA and Medicare, although calculations of the effective income tax rate do not typically lump in those numbers.
Another point worth making: even if you closed the loopholes and really stuck it to the uber-rich, we aren't really talking about a lot of people, as Jonathan Karl of ABC News reveals:
The Top 400 tax filers – the very richest Americans – do pay a lower rate of just 18.11 percent of their total income. Why? Many of them are hedge fund managers and people like Buffet — their income is pegged how much their investment fund grows. For some reason, this income is counted as so-called “carried interest” (even though it is not interest at all; it’s more like a performance bonus) and is taxed at the lower 15 percent capital gains rate.
It’s a loophole for hedge managers, pure and simple. But while it may be an outrage that these uber-rich hedge fund managers pay such a low rate compared to the rest of us, there are just not many of them out there.
But the top 400 tax filers represent a tiny sliver – just .00028 percent of all filers. The vast majority of those earning over $1 million a year pay at a higher rate, which is why the average tax rate for this group, according to the Tax Foundation, is 29.1 percent of taxable income. And, yes, this number includes income taxes, payroll taxes and capital gains taxes.
Either way, I don't think Ms. Bosanek has much to worry about. Buffett has plenty of money coming in these days.
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