(Excerpted comments begin at about 7:10 into the vid)
While you, most of you here have Social Security tax on every dime you’ve ever earned, you’ve got billionaires and millionaires who are paying on only a tiny ….. fraction of their income.
I’ve got a friend in Omaha, you may have heard of him, named Warren Buffett. He’s worth $56 billion. Y’know, if he’s only paying the first $100,000, that is .000001% of his income as he’s paying Social Security. I may have lost a couple of zeros in there.
The point is, it’s negligible to him, it’s not even noticeable. I think that’s why the best way forward is to first look to adjust the cap on the payroll tax, so that people like me, because I’m earning a bit more than $102,000, pay a little bit more and people in need are protected.
Folks, I cleaned up what Obama said as much as I could. Somebody ought to call Joe Biden and see if he wants to take back his comment about how articulate this guy is, instead of apologizing for having said it.
Anyway, here’s a translation of the bolded paragraph above I can (sort of) work with:
I’ve got a friend in Omaha, you may have heard of him, named Warren Buffett. He’s worth $56 billion. Y’know, if he’s only paying Social Security tax on the first $100,000, that is .000001% of his income on which he’s paying Social Security tax. I may have lost a couple of zeros in there.
You lost more than a couple of zeros, pal. You wanted your audience to mentally divide $100,000 by $56 billion (if you’re keeping score, that’s 0.00018%) — as if Warren Buffett’s income, which Obama never disclosed and probably isn’t known in total, is the same as his net worth. O,M,G.
Someone ought to tell Obama that:
- Income is what you earn.
- Net worth is what you have (after subtracting what you owe).
- Warren Buffett probably earns most of his income, which he said was more than $46 million in calendar 2006, from capital gains and dividends, against which there is no Social Security tax (yet).
- People pay Social Security tax on their income from work or self-employment, not on their net worth (yet).
- If Warren Buffett currently has earnings from work of $5.6 million (my recollection is that it’s probably lower than that), Obama was “only” off by a factor of 10,000 ($56 bil divided by $5.6 mil) in that element of his attempted “calculation.” Also, the current taxable earnings limit of $102,000 would be 1.8% of Buffett’s earnings from work, not “.000001%.”
- Under Obama’s proposal for Social Security, if Buffett’s earnings from work really is $5.6 million, he will pay over $663,000 more into the system —
- Warren Buffett, whose net worth is $56 billion, might indeed see this tax increase as “negligible to him …. not even noticeable.” I would suggest that someone with little previous net worth earning $5.6 million for the first time might more accurately see being forced to cough up an additional $663K as theft by government.
- Pile the 12.4% marginal tax just shown on top of the top federal income tax rate of 39.6% that would return if the current tax law isn’t extended, the 2.9% Medicare tax on all earned income, and at least 5% for state and local income taxes, and you’re at a marginal tax rate of just under 60%. That’s ridiculous.
Whether Barack Obama actually understands any of this is questionable.
This is the same guy who says that his earnings of roughly $4 million in 2007 (including book royalties, which are subject to Social Security taxation up to the current limit) is “a bit more” than $102,000. Some “bit.”
This guy is one election win away from being in charge of a $3 trillion-plus budget and responsibility for steering US economic policy.
O. M. G.