In his lecture to students in my hood yesterday, President Obama tried to present himself as a champion of the rights of the downtrodden by contrasting the tax rates of millionaires with those of their employees. The example he used was Warren Buffett and his secretary:

Obama: That’s not fair. A quarter of all millionaires pay lower tax rates than millions of middle-class households.

Audience: Booo.

Obama: Not fair. Warren Buffett pays a lower tax rate than his secretary. I know because she was at the State of the Union. She told me. (Laughter.) Is that fair?

Audience: No!

Obama: Does it make sense to you?

Audience: No!

Actually, the above doesn’t make sense, because it doesn’t withstand basic tax analysis.

Buffet himself declares that he pays a 17.4 percent rate on taxable income. His staff, like Bosanek,  pay an average of 34 percent. The IRS publishes detailed tax tables by income level. The 2009 results  show that the average taxpayer paying Buffet’s 17.4 rate earns an adjusted gross income between $100,000 and $200,000. But an average taxpayer in Bosaneck’s rate (after downward adjustment for payroll taxes) earns an adjusted gross income  of $200,000 to $500,000. Therefore Buffett must pay Debbie Bosanke a salary well above two hundred thousand.

We must wait for further details to learn how much more than $200,000 she earns. The tax tables tell us about average ranges. For all we know she earns closer to a half million each year, but that is pure speculation.

I have nothing against Debbie Bosanke earning a half million or even more. Buffett is a major player in the world economy. His secretary deserves good compensation. At her income, however, she is scarcely the symbol of injustice that Obama wishes her to project.

I imagine that there are any number of secretaries who would want her job and her place in the Congress gallery for the President’s State of the Union address.

Another explanation may be that the secretary, or Buffet, or Obama, simply lied.

I find his statement that “a quarter of all millionaires pay lower tax rates than millions of middle-class households” disingenuous, because if we assume that “millionaire” is defined as having a net worth of  over one million dollars, and “middle class” is defined as making (in Obama’s words) “less than $250,000 a year — which 98 percent of Americans do” then two assumptions are being made.

One is that this “quarter of all millionaires” even have enough actual income to be subject to taxation at the same rates as those who have earned income of up to $250,000 per year.  Many of those painted as the wealthy elite are retired and living off whatever they socked away after taxes. Some may be real estate poor and have little or no income.

Income tax is tax on income, right? Or does Obama think there should be a tax on money that has already been taxed and somehow saved anyway? If so, then why doesn’t he come right out and say that he is in favor of confiscation of already-taxed wealth?

The second problem I see is a substantial portion of  the 98 percent of Americans who make up to $250,000 a year may already be millionaires on the balance sheet. They may have done well on income they managed to save or invest, as well as appreciated real estate. And if they are millionaires, are they included in both groups Obama’s dichotomy?  Because if they are “among the less than $250,000 a year — which 98 percent of Americans do” as well as in the “quarter of all millionaires pay lower tax rates than millions of middle-class households,” then they become both the evil millionaires and the oppressed classes at the same time.

But such follies cannot be, can they? Not unless we want people to wage class warfare against themselves. I mean, even if you’re a Marxist, the slogan “eat the rich” is not supposed to mean having the rich eat themselves.