The Warren Buffet Lie

September 22, 2011

From the President down to the water cooler, we hear that Warren Buffet pays a lower tax rate than his secretary. That is simply untrue.

The fallacious statement is based on the assumption that his secretary pays about 25% of her income in FICA and income taxes while Buffet pays a 15% rate on capital gains and qualified dividends. It sounds terribly unfair, but it ignores the double taxation of investment income.

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