A $16 Muffin: Would Buffett Give His Secretary One?

Since Warren Buffett has emerged as the populist champion for higher taxes and increased government spending,  I wonder what he would say to his secretary about the $16 muffins that government employees are gobbling down at Department of Justice conferences? And I wonder if it would bother him that his secretary’s tax dollars are being used to pick up the tab?

Here’s the story, as reported by many online and dead tree media outlets this morning, including Politico: “Audit: DOL’s costly dining“:

Someone’s not clipping coupons.

The Department of Justice spent about $490,000 on food at 10 conferences held between Oct. 2007 and Sept. 2009, according to a DoJ inspector general audit, Bloomberg reported.

On the menu: $65 dinners, $76 lunches, $41 breakfasts, $16 muffins, $32 per person snacks at a single break and beef Wellington appetizers that cost $7.32 per serving. For a beverage break at one conference, attendees sipped on coffee and tea that went for up to $1.03 per ounce, making an 8-ounce drink $8.24.

“Some conferences featured costly meals, refreshments, and themed breaks that we believe were indicative of wasteful or extravagant spending,” the report on Tuesday said.

The review found that the DoJ spent about $120 million on 1,832 conferences in 2008 and 2009. In 2009, the DoJ spent $73.3 million on conferences compared to $47.8 million in 2008. At the ten conferences reviewed in the audit, the department shelled out $4.4 million.

Those attending an August 2009 Executive Office for Immigration Review conference gobbled up the $16 muffins and had the chance to sample $10 cookies and brownies as well. Guests at a March 2009 conference of the Office on Violence Against Women ate Cracker Jacks, popcorn and candy bars at a single break that cost $32 per person. The $7.32 beef Wellington hors d’oeuvres were eaten by attendees of the February 2008 Executive Office for U.S. Attorneys conference.

The report followed up one from 2007 that showed the DoJ did not have proper policies and procedures in place to limit conference spending. One example featured in that audit was $5 Swedish meatballs. In response, the DoJ issued policies to control spending in 2008.

Wonder who got to keep the little gift prizes in the Cracker Jack? Woot. I digress.

Does government in total operate with this kind of complete disregard for fiscal responsibility and spending taxpayer money in the best interests of, ah, well, taxpayers? No. But it reinforces the perception that tax money goes directly from our wallets and purses into a rat hole never to be seen or heard of again.

We’re dealing a lot in perception these days. And this gets us back to the Oracle of Omaha and the so-called “Buffett Rule” — the notion that this country will thrive only to the extent that high-income wage earners hand over more and more of their cash to the government.

An AP story yesterday based on info from nonpartisan policy wonk organizations and the IRS kind of shoots down the idea the millionaires are paying a lower tax rate than secretaries and others who pay some tax beyond Social Security. Here’s from the AP story “FACT CHECK: Are rich taxed less than secretaries?“:

President Barack Obama says he wants to make sure millionaires are taxed at higher rates than their secretaries. The data say they already are.

“Warren Buffett’s secretary shouldn’t pay a higher tax rate than Warren Buffett. There is no justification for it,” Obama said as he announced his deficit-reduction plan this week. “It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million.”

On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.

The 10 percent of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes, according to the Congressional Budget Office.

In his White House address on Monday, Obama called on Congress to increase taxes by $1.5 trillion as part of a 10-year deficit reduction package totaling more than $3 trillion. He proposed that Congress overhaul the tax code and impose what he called the “Buffett rule,” named for the billionaire investor.

The rule says, “People making more than $1 million a year should not pay a smaller share of their income in taxes than middle-class families pay.” Buffett wrote in a recent piece for The New York Times that the tax rate he paid last year was lower than that paid by any of the other 20 people in his office.

“Middle-class families shouldn’t pay higher taxes than millionaires and billionaires,” Obama said. “That’s pretty straightforward. It’s hard to argue against that.”

There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service. But that’s less than 1 percent of the nearly 237,000 returns with incomes above $1 million.

This year, households making more than $1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes, payroll taxes and other taxes, according to the Tax Policy Center, a Washington think tank.

Households making between $50,000 and $75,000 will pay an average of 15 percent of their income in federal taxes.

Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5 percent of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7 percent.

The latest IRS figures are a few years older — and limited to federal income taxes — but show much the same thing. In 2009, taxpayers who made $1 million or more paid on average 24.4 percent of their income in federal income taxes, according to the IRS.

Those making $100,000 to $125,000 paid on average 9.9 percent in federal income taxes. Those making $50,000 to $60,000 paid an average of 6.3 percent.

Obama’s claim hinges on the fact that, for high-income families and individuals, investment income is often taxed at a lower rate than wages. The top tax rate for dividends and capital gains is 15 percent. The top marginal tax rate for wages is 35 percent, though that is reserved for taxable income above $379,150.

I’m all for fair and equitable taxation. But I’m becoming more and more convinced that we have a government spending problem and not a revenue problem. (And yes that involves me as I inch my way toward Medicare.) And the notion — the perception really — that higher-income wage earners are somehow escaping without paying a fair share of taxes just doesn’t cut it.

Muffin anyone?

 

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