More Fact-Checking of Warren Buffett

Warren Buffett famously claimed in the New York Times that he paid only 17.4% of his 2010 income in taxes, which was a lower rate than the other 20 people in his office, whose tax rates ranged from 33% to 41%, and averaged 36%.  It's been well-documented by now that Buffett's low rate was extremely atypical for the "super-rich" and his tax rate can only be that low because he received almost all of his taxable income as capital gains and dividends, which are taxed at only 15%.  

Nick Kasprak at The Tax Foundation now does some fact-checking and finds that:

"The effective rates Buffett claims for other workers in his office are extraordinary. To me, they seem too high to be realistic, and I can't figure out how he calculated them, even if you include all payroll (employee and employer side) taxes. Even if you assume the scenario that leads to the highest possible tax burden (single filer, no deductions), a taxpayer would have to make at least $285,388 (in 2010) before his or her effective rate reaches 33 percent. 41 percent is impossible."

Nick Kasprak provides the handy calculator below that shows the highest possible tax rate for any amount of income, assuming a single filer with no deductions or credits (enter any income amount in wages below and click somewhere outside of the calculator area): 



Bottom Line: An effective tax rate of 41% is impossible.