Updated 1:10 pm ET
President Obama paid a total federal tax rate in 2011 on adjusted income of $789,674 that may be lower than that of his secretary, even though she earned substantially less.
Obama has spent the past week touting the Buffett Rule, which calls on those who make $1 million – just a little more than Obama made – to pay at federal tax rate of at least 30 percent. The rule was inspired by Buffett’s comment that he paid a lower tax rate than his secretary.
The most recent information about salary regarding Obama’s secretary is for his former secretary, Katie Johnson, who is listed by the White House as having made $90,000 in 2010.
According to Wikipedia, Johnson is 31 years old and now attends Harvard Law School. I don’t know about her personal life or what her deductions would be, so I can’t assume any children or extra deductions.
On a $90,000 salary, she would pay $16,578 in federal taxes, $3,780 to Social Security, and $1,305 in Medicare taxes.
That adds up to a total federal tax burden of $21,663 on $90,000 in adjusted gross income, or a tax rate of 24 percent.
Obama’s federal income tax rate was 20.5 percent. If you include the Medicare and Social Security taxes paid by Obama, his total federal tax liability is 21.8 percent, fully two percent less than that of his secretary even though his adjusted gross income was nearly nine times hers.
292 thoughts on “Did Obama Pay a Lower Rate Than His Secretary?”
If Obama were the CEO of a corporation, and the corporation provided him and his family with luxury housing, food, and private jet transportation, all of that non-cash compensation would be included in his taxable income. So his real tax rate, as compared to a private citizen, is much, much lower than 20%.
Beware of Corporate CEOs who fly around in 747s. They are not to be trusted=Obama
If Obama pulled in “a[n] gross adjusted income $789,674” then this statement “which calls on those who make $1 million – just a little more than Obama made” is misleading at best. An extra $210,326 is not just a little bit more. It’s almost a 27% increase in his current AGI. You then go on to say “or a tax rate of 24 percent, well above Obama’s rate of 20.5 percent” where you point out that a 3.5% increase is significant.
While I don’t agree with Obama on a lot of things, I personally think Taxes in the US are too high period. But, the difference in Taxes paid by those making <1mil is really quite hard to justify.
I was getting ready to use this info to post on another site, then I realized there was an error in Koffler’s calculations. He included S.S. and Medicare taxes for the secretary but this is not included in Obama’s return. If you subtract out S.S. & Medicare his secretary only pays 18.4% which is less than Obama. I mention this so that readers don’t pass this on and subject themselves to ridicule by the left when their error is pointed out.
Exactly….which won’t stop you from hearing it all night on Fox News
I have added in Obama’s rates for Social Security and Medicare. Obama’s overall rate is still lower.
Obama is such a clown and fraud that it’s almost funny. I can’t believe I got sucked into his BS (I’m a hopelessly liberal, extreme leftist Democrat) and voted for him. I won’t make the same mistake again. In my opinion, he is worse than Bush — much more of a hypocite. I cannot vote for a Republican, but none of my Dem friends are going to vore for more Obama either, si although none of us will vote, ALL of us expect Romney to cream him. Good riddance.
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Hey Keith, pointing this out in case someone hasn’t already:
Your numbers aren’t even remotely accurate. It is not clear to me how you got $16,578 in federal taxes on $90,000 of income. But, she’s not going to pay taxes on $90,000 of income under any circumstances.
You say that you can’t know anything about her personal circumstances, etc. but you can make very conservative assumptions.
Assuming Katie Johnson is single and earning $90,000 she still at the very least gets the standard deduction and a personal exemption.
Standard deduction for singles is: $5,800
Personal exemption is $3,800.
90,000 minus $9,600 is $80,400.
The Tax Table in IRS Publication 17 shows the federal income tax for taxable income of $80,400 for a single is: $12,356.
http://www.irs.gov/publications/p17/ar02.html#en_US_2011_publink1000265415
That’s $4,222 less than your calculation.
Also, if you’re going to count Medicare for her, you’d better factor that into POTUS rate too (most ETRs don’t consider Medicare).
Woops. REad the wrong column in the tax table. Disregard the above.
Keith, Mighty nice of you to presume NO deductions at all. However, the bigger issue is why Obama (and every other rich liberal) doesn’t just forgo deductions altogether and pay taxes on their unadjusted income. They don’t need a law to step up and lead – VOLUNTARILY.
I find it an interesting concept and would be interested in being part of Volunteers for Fair Taxes.
Thank you for making an argument for Buffet Rule. I just ran across your work and will look forward to see if you are more than a fault finder, but a truth teller and one who shines the light on broader issues.
Pete
This is shoddy reporting at it’s best and just shows how some reporters will twist the facts to make a story. First of all you are comparing apples to oranges. You included her Medicare and SS taxes into your figure then compared it to Obama’s income tax rate which doesn’t include Medicare or SS. So her rate is more like below 18%. Plus, seeing as you don’t know what her deductions are, and she must have some, then her rate is most likely even lower. I’m no fan of the President, but telling half truths isn’t the way to defeat this guy. Just stick to the facts cause they are damaging enough on their own.
That’s kind of the point. Has Buffet ever given the specifics of what HIS secretary gets paid, her filing status, her deductions? Funny how liberals never seem bothered by the lack of supporting facts for THEIR side of the argument.
@Brian Ever heard of an Ad hominem attack….which is where you attack the person instead of responding to the actual debate…..which is what you have done here.
When you use Mr. Koffler’s shoddy reporting and say, “Yeah, but they never gave Buffett’s secretary’s deductions” it is like saying “two wrongs make a right”. You can attack the lack of info about Buffett’s secretary, but is really a separate argument to what Koffler has tried to do here. He wants you to believe that the President paid a lower percentage of his adjusted gross income in taxes than his secretary (from 2010) which is clearly not the case.
Just factual inaccuracy.
Forget the tax rate.
A more interesting question is what kink of foreign investments does Obama have?
He claimed a $5841 foreign tax credit deduction. He may have more foreign income than a lot of his supporters in this country earn. Won’t that money have created some American jobs if it had been invested in this country?
pretty sure that would be for book sales abroad.
Good ol’ do as I say, not as I do, hypocritical Liberals in action. Isn’t it great having a man child president that works everyone against each other in this country as his wife and himself live on the Taxpayers dime. Progressives are busybodies constantly injecting themselves into everyones lives while they exempt themselves from any scrutiny. Buffet is embroiled in a tax fight with the IRS over millions he owes, but you know what’s really funny? Not one of these arrogant, sanctimonious Liberals ever offers to pay more than they owe in taxes, especially this clown of a president, and most of them that are the biggest complainers about everyone paying their fair share, are multi-millionares like the Obama’s.I find that interesting since they are always concerned about how much tax money is coming into the Big Government, don’t you???
there’s basically zero facts contained in this article. just partisan driven speculation and assumptions.
Which would be the same as the justification for the Buffet rule in the first place, wouldn’t it? Or do you have access to the never=reported details of what Buffet’s secretary earns and pays in taxes?
Wow… so much wrong with this “article”. I am a Republican and shocked by your journalist skills. First of all, “just a little more than Obama made” – Obama would need to make more than $200,000 in extra income to hit the Buffett Rule. Tell families that survive on way less than $100,000/year that this “just a little”.
Second, many other commenters bring up great points about tax calculations. Maybe you should have consulted with a tax expert before spewing out this article. If the secretary is now in law school, she probably can take advantage of several credits that would bump her down to a level no where close to Obama’s tax rate.
She wouldn’t have been in law school while working at the White House.
The secretary’s 10% DC taxes from the year before reduce her Adjusted Gross Income, just like interest credit if she has a mortgage, etc. So Keith, what are you are saying is Obama’s *effective* tax rate is lower than his secretary’s *highest possible* tax rate, based on her published salary, when you really don’t know anything else about her, and suggesting that she had the lower tax percentage. There’s also quite a bit to be commended about Obama’s charitable donations of $172K (more than he paid in taxes, 22%) that helped to bring down his effective tax rate. Also, effective tax rates that are reported and referenced usually do not include Medicare or SS, but rather, just the income tax portion. I agree with the other commenters that you should have consulted a tax attorney or a CPA before publishing this post to ensure accuracy, as it currently demonstrates very little proficiency with the US tax code.
Exactly!
Law school starts in the fall. So assuming she is in law school right now, she enrolled last August 2011 and spent half the year as a student. Yes, she would not be in law school while working in the White House but her half year as a student is still calculated in her taxes.
no shock here. obama is a swindler and a liar. who didn’t know that?
So whats the point? Obama believes that people making over $250,000 should not have the Bush tax cuts and that would make him pay a higher percentage.
But still the people making over a million dollars a year should pay at least 30% of their income in taxes. Yes Obama paid less then his secretary in taxes. But if the Bush tax were taken off the table for people making over $250 per year then it would change the scenario. Smoke and mirrors assertions can only confuse the masses.
there’s the thing, EVERYONE has some deductions at least a standard deduction if you don’t have itemized, so you’re math for her taxes are wrong. Who knows, with the standard deduction your point might still be valid, but do the right math first.
The solution to the tax problem is really very simple. Democrats think they should be paying more taxes and Republicans think they should be paying less. So, raise the taxes on Democrats 10% and lower in on Republicans 5%. You get a net gain of 5% and everyone is happy. Problem solved.
Then everyone will become Republicans!!!!!
You acknowledge that you don’t know anything about deductions or credits of the secretary, but you’re saying at the same time the Prez’s tax rate is lower than his secretary’s? assuming that the secretary has 90k in AGI is assuming no deductions (not even the standard deduction).
That doesn’t make any sense because you’re comparing the President’s EFFECTIVE tax rate with the secretary’s BASE tax rate- you might as well be comparing apples and coconuts for all the good that comparison does for the point you want to make. Same point to be made with corporate tax- while the base rate is, as everyone whines about, higher than almost any other industrialized nation, the effective rate brings it back to Ireland-level rates, if not lower. Granted, transaction costs are to be considered, after all, building up a corporate return that minimizes a tax liability takes an army of accountants and lawyers. So I do think a reduction of corporate rates, combined with a simplification of the tax code makes a whole lot of sense. Not going to happen anytime soon though- congress likes using the tax code as a carrot and stick too much.
and just as an aside, my income was a little more than the secretary’s, but my effective rate was about 18.5%. so really, obama’s rate doesn’t razzle me too much. ahhh, the value of actually taking relevant information into consideration…
Um, hello? The Buffet rule is based on comparing the marginal rate with the effective rate. Virtually NOBODY in the middle class pays 30%. This is all smoke and mirrors, and looks like you fell for it.
would bet buffett’s secretary is a one percenter who pays nowhere near the percentage buffett claims
yeah, i think the consensus is in.
Koeffler’s an idiot.
It’s Koffler.
Keith…..that will show him. If you default to name calling, at least spell the name right :-)
The Dems have unleashed their paid posters..
Eliminate the Federal Income Tax altogether. Bam! Everyone has the same Federal Tax rate.
as usual the left misses the point. the point is obama is always screaming about the buffett rule and it appears once again he screams about one thing while doing another himself
Everyone is missing the point!
I agree with Obama, everyone needs to pay their fair share. He should set a good example for everyone and be the first one to start. He’s welcome to use the standard deduction and not itemize. C’mon O, let’s pay our fair share.
$278K in itemized deductions?!?! WTH?
Seriously Obama’s, let’s pay our fair share. Take the standard deduction like many Americans have to. Amend your tax return so you can pay an equal or more percentage rate than your secretary. It’s only fair.
If we focused more on reducing loopholes and/or deductions, we could actually drop the income tax while keeping the revenue the same or even higher than current levels. Democrats like to raise the rate because it makes it appear like they’re sticking it to wealthier people. But the fact, is this always leads to less revenue because the wealthy offset it with good tax advice. If we cut the loopholes and lower the rate, we’ll get rid of the charade.
I’m not wealthy by any stretch of the imagination, but the loopholes are to encourage investment, home ownership and the like. I don’t have wealth envy.
I’m glad people can be wealthy and can use the “loopholes” or deductions, that btw both dems and repubs have signed into law, to give the government less of my money. They don’t need more, the need less. Long live the job creators including the 1 % family, the Obamas.
Hey Duuuuuuuude,
The Obama’s don’t have to use the “loopholes” or deductions. No one forced them to give $12K to their kids. Just because it’s legal doesn’t mean they have to do it. They need to set an example for the rest of the country… If you want other people to pay their fair shair then you need to set an example and do it too…
http://freebeacon.com/obama-family-tax-shelter/
Right on – there is no law preventing anyone from paying more than the minimum amount for their taxes. I think that both BO and WB should step up to the plate, set an example, and put in 50% of their earnings. They seem to both be so convinced that the government spends our money in the best possible manner. Well then, they should opt to give more.
What was his GROSS income ???? What kind of slight of hand deductions did he take, and why did he not pay AMT ????
AMT comes into play if a great part of your income comes from investments that are subject to AMT, like certain municipal bonds.
@Spanky You can check out his full tax return at Whitehouse.gov. Nothing is being hidden…..you just have to look for it. Here is the link http://www.whitehouse.gov/sites/default/files/rss_viewer/POTUS_taxes.pdf
The real issue here is the numbers. The supposed justification for the ‘Buffet rule’ is that millionaires should be paying 30% so they’re paying more than the middle class. But virtually nobody in the middle class pays 30%. Obama make over three quarters of a million dollars, a sum most people would consider beyond the middle class, and paid a rate in the low 20’s. Buffet is the modern day P.T. Barnum, and anyone that buys his snake oil deserves the disaster they voted into the Oval Office in 2008.
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I agree with mike. Eliminate the IRS and use the 16th amendment to tax EVERYONE with a flat rate of 4% NO DEDUCTIONS at all.
The current graduated structure is UNCONSTITUTIONAL for violating the Equal Protection clause….The current policy creates different classes of citizens, some for reward and some for punishment, and deductions are equal to ALL the people.
I wont talk about AMT as it is unconstitutional on its face as a PUNITAVE tax.
Your calculation ignores the possibility that his secretary may have paid some state and local taxes (for which she would earn a deduction), the possibility that she contributed to a qualifying retirement plan (for which she would earn a deduction), the possibility that she had medical expenses and the remote possibility that she made qualifying charitable contributions (for which she would earn further deductions). Any or all of these deductions to gross income would likely result in a lower tax rate.
Unfortunately, the headline that you blared is the headline that will be repeated on Hanitty et al–not the more likely actual case.
Once the punchbowl has been fouled, it is very difficult to remedy. Then again, you were successful in your mission to foul the punch bowl, fairness and accuracy be damned.
Here’s a copy of Obama’s tax form:
http://www.dailyfinance.com/2012/04/13/obama-tax-return-shows-2011-earnings-of-789-674/?icid=maing-grid10%7Chtmlws-main-bb%7Cdl1%7Csec1_lnk3%26pLid%3D151798
What would the foreign tax credit be for?
The “Buffet Rule” has been debunked. While Mr Buffet may pay a lower income tax rate than his secretary what he fails to disclose is that most of his taxes come off of capital gains from investments. What is conveniently left out of the conversation is that that investment income has been taxed once already (corporate taxes) before it is paid out to him as income. Thus making his tax rate WELL over 30% and approaching 40%.
Stop, you’re making to much sense for the average person.
Yes, the system needs junked! The “taxing the wealth” is just a ruse. Anyone with the simplest understanding of economics understands that corporate tax just gets passed along to the consumer in the cost of goods and services. In fact, you’re not only paying the corporate tax when you buy a product, but the transportation taxes to deliver it, the 18.5% fed gas tax for the gas they put in the truck to get it to your house (or for you to pick it up) the taxes on the raw materials that were used to make it, the import tax for that item above the tax on the purchase of the material, and on and on. Here’s a scenario. You decide to go fishing one evening with your buddy. You throw a few beers (50% of the cost is tax) in a cooler and a PBJ (132% import tax on PB)(30% of the cost of a loaf of bread is tax), and a coke (tax = 36% of cost), grab your fishing license (all tax), your pole (10% fed tax on fishing equipment), and a flashlight (125% import tax on flashlights), hop in your SUV (gas guzzler tax of $5,000) which is insured ($34/yr person tax), get some gas (48 cents/dollar tax), pick up your unemployed buddy ($1,600/yr-person unemployment tax, and head to the federal park where you pay a tax to get in. In fact, taxes (according to sources I’ve found on the Internet) account for over 55% of personal spending. I’m sure you could add to my scenario without having to think too hard. The fact is that the government is breaking our backs and “passing the buck”. The system is rigged to make the producers and service providers look like the bad guys while the government hides what they are taking from us. Don’t buy into the status quo. Not only is the gov hiding the money they’re taking, but they’re not being held accountable to it because people don’t realize their taking it. A flat or sales tax system would at least ensure that we know where our money is going so that we can hold people accountable for how they spend it.
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i made $425K and my tax rate was 47.2%… single guy…
Yea, well start a family and you’ll be able to pay considerably less than that. And that’s not your federal tax rate, which is what we’re talking about. Why stop there, why not add sales, property, all excise taxes in too, heck, you’re probably looking at a tax liability of over 100%
So, are you saying the payroll tax ought to not have a cap? What are you saying?
every dollar should be taxed at same rate… 0%…
http://www.aynrand.org/site/PageServer?pagename=arc_ayn_rand_the_nature_of_government
“A society that robs an individual of the product of his effort, or enslaves him, or attempts to limit the freedom of his mind, or compels him to act against his own rational judgment-a society that sets up a conflict between its edicts and the requirements of man’s nature—is not, strictly speaking, a society, but a mob held together by institutionalized gang-rule. Such a society destroys all the values of human coexistence, has no possible justification and represents, not a source of benefits, but the deadliest threat to man’s survival. Life on a desert island is safer than and incomparably preferable to existence in Soviet Russia or Nazi Germany.” -AR
Obama is wanting to fix this situation! He’s aware of it. The Republicans don’t seem to be.
I know. I think they think they’re making a point but they don’t realize they’re making the President’s point for him.
Wait for the vote in Congress to see if the Dems unanimously support his proposal. Then ask yourself Is it really all the Republicans fault?
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That’s change you can believe in.
I’m not sure I understand, President Obama is arguing for the tax policy to be put in place, he isn’t claiming he voluntarily participates in the policy already. What exactly is the point? You’re saying he paid a lower rate than his secretary? So you’re arguing his FOR his policy?
Posting this commentary as a gotcha is idiotic. It simply reiterates Obama’s/Buffet’s point that the structure favors high earners over medium to low earners. I don’t subscribe to the theory because high earners already pay far in excess of their “fair share” (whatever that means) because they pay such a higher percentage of the total tax than the rest. Also, it seems to me the motivation for ANY tax policy, whether it be an increase or decrease, should be to either grow the economy or pay down a significant portion of the debt. Since the Buffet/Obama Rule will do neither, it should go the way of ObamaCare – crash and burn…
In all this discussion of the Buffett rule, the thing that is being completely ignored is Social Security taxes. In 2011, Social Security tax is only collected on the first $106,800 in wages. So ALL the wages of Buffett’s secretary has Social Security withholding taken out, which drives up her total tax rate to 35.8% as stated by Buffett. However, less than 1% of Buffett’s income is subject to Social Security withholding.
So MOST of the tax rate disparity is due to Social Security taxes NOT income and capital gains tax rates!
If the president truly beleives he should pay more taxes he could have written a check for more than the amount he owed. What happened to leading by example?
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It doesn’t matter… if someone tries to make this a campaign issue, he simply says that it’s not his fault, it’s Congress’s fault because he wants to raise taxes for the millionaires that make over $250k.
Forget the Buffet-tax we need the Obama-secretary tax or both of them just shut up and write checks.
Hi Keith,
Weird that the returns of VP have the SSNr blackened, while for the Obamas there’s NO SSN at all.:)
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I’m
Pretty certain that is exactly his point in changing the tax code as it currently stands. Hello?!?! The more you make, the less tax burden you suffer with. By the way, I only paid a 10% rate because of all my deductions!!! Best year of my life. Thanks Obama!! Sucks if your poor though!!!! Bing!!
being the secretary to the anti-Christ must have some tax credit, right?
Come on guys, haven’t you figured this out by now? Elitist liberals don’t want to pay more in taxes, they just everyone else to pay more in taxes……
I have a great way to fix all of this. On your tax return now there is a box you can check to donate to the presidentail election. I think we should put another box there to check if you want to pay more in taxes and then a line for how much more you think you should pay. That way Warren Buffet and all these Hollywood types can pay what they think is fair.
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