CNBC: Warren Buffett Defends His Secretary From 'Ridiculous' Attacks

By: Alex Crippen
Executive Producer 

 

 Published: Friday, 27 Jan 2012 | 12:47 PM ET

Warren Buffett's assistant Debbie Bosanek speaks with NBC's Tom Brokaw in this frame grab from a 2007 report on Buffett's call for higher taxes on the super-rich.

Warren Buffett says criticism of his secretary, Debbie Bosanek, over her supposed high salary and purchase of a second home, is 'ridiculous' and misses the point he's trying to make on tax rates for the very rich.

During his State of the Union address this week, President Obama said it isn't fair that Buffett pays a lower tax rate than his secretary does, arguing for a "Buffett Rule" that would impose a minimum 30 percent tax rate on those making a million dollars or more per year.  Bosanek had been invited to sit in Michelle Obama's box to watch the speech.

Buffett tells the Omaha World-Herald, "They can't attack the facts, so they attack the person. It's ridiculous."

His point: "I'm saying she is being treated unfairly in the tax code, as are tens of millions of others, compared to me.  They shouldn't change the rates on all the other people.  They should change mine."

As for a Forbes blog post by contributor Paul Roderick Gregory estimating Bosanek earns between $200,000 and $500,000 a year, "making her scarcely the symbol of injustice that Obama wishes her to project," Buffett replies that Gregory "doesn't have any idea, just zero.  If I were to estimate his salary, I'd probably be closer than he is."

Buffett says all the online guesses about Bosanek's salary aren't correct, but neither he nor she will reveal her actual salary because they say it's a private matter.  She does, however, feel that she is "treated fairly at Berkshire"  Some critics have argued that since Bosanek allowed herself to be injected into the public debate, she should release her tax returns. 

As for her newfound fame as a symbol for President Obama's push for a "Buffett" tax rule, Bosanek says, "They needed to pick one person, and I was the lucky person they picked, or unlucky."

She adds that Buffett never implied she is poor or underpaid.  "It's not like I look forward to paying taxes, but I don't mind paying taxes as long as everybody's treated fairly. . I'm not saying anyone should feel sorry for me or lower my taxes."

She's also not apologizing for the second home she and her husband purchased in Arizona last summer for $144,000:

"I share Warren's view about the future of America, and we believe that our country will do just fine. I'm happy to make this investment.  Hopefully in 10 years, when I turn 65 and Warren turns 92, I will be able to convince him to finally retire so I can retire, after working 47 years, and spend some time where the sun shines in the winter." 

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WALL STREET JOURNAL: Will Buffett Avoid the Buffett Rule?

By JAMES FREEMAN

• JANUARY 28, 2012, 12:56 P.M. ET

Billionaire Berkshire Hathaway CEO Warren Buffett is once again thrilling the political class by volunteering other people to pay higher taxes. Long-time observers recall his opposition to former President George W. Bush's efforts to reduce the tax rate on dividends. Since Berkshire pays no dividends, Mr. Buffett had little at stake but enjoyed the opportunity to pose as if he were a rich guy eager to cough up more dough to Washington.


In the current debate, President Obama is pushing the "Buffett Rule" to ensure that high-income earners pay higher tax rates. But even if it's enacted, don't expect the Buffett Rule to have much impact on Mr. Buffett. By an amazing coincidence, the sage of Omaha is already positioned to shield most of his rising wealth from such a tax.

Political journalists who don't read the business press are the most likely to be duped by Mr. Buffett's pose as a public-spirited billionaire happy to pay more to support the government. He frequently suggests that tax hikes will have little impact on investment activity. In a New York Times op-ed last August, Mr. Buffett said, "I have worked with investors for 60 years and I have yet to see anyone -- not even when capital gains rates were 39.9 percent in 1976-77 -- shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off."

But he seems to have concluded that a potential tax bill might have scared off some owners of the Burlington Northern Santa Fe railroad when Berkshire was negotiating to buy it. According to a January 2010 Barron's story, Mr. Buffett "said that, while he's not enthusiastic about issuing more shares, the deal is too large to be all-cash and that he wants to give Burlington shareholders a tax-free option."

In another case, it's not clear if Mr. Buffett was scared but he certainly appears to have been angry when Kraft Foods, partly owned by Berkshire, didn't pay as little in taxes as he wanted them to. In another Barron's story from May of 2010, the magazine reported that Mr. Buffett "groused about a tax bill of roughly $1 billion that Kraft incurred by selling its pizza business to Nestlé, the world's largest food concern, for $3.7 billion, to raise additional funds. 'Dumb' was Buffett's word of choice."

This brings us to the Buffett Rule, which at its heart is a way to raise taxes on dividends and capital gains. Berkshire still doesn't pay a dividend, and as for capital gains taxes, well, Mr. Buffett has already made clear that he'll largely avoid them by transferring his fortune to the Gates Foundation and to charitable trusts controlled by his family. In fact, at the 2010 Berkshire annual shareholders meeting, according to Dow Jones Newswires, Mr. Buffett urged attendees to "follow my tax dodging example" and give away their wealth. Democrats in Washington may enjoy using Mr. Buffett as cover to raise taxes, just as long as they understand that he won't necessarily be paying them.

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ABC VIDEO: Warren Buffett & his secretary speak

Buffett's assistant, Debbie Bosanek & Buffett speak to the ABC about tax and the politics of envy.

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CNBC: Does Warren Buffett's Secretary Really Make Over $200,000?

Published: Thursday, 26 Jan 2012 | 1:00 PM ET

By: Alex Crippen
Executive Producer

Getty Images Warren Buffett's assistant, Debbie Bosanek.

Forbes contributor Paul Roderick Gregory got some attention with his post Wednesday afternoon headlined "Warren Buffett's Secretary Likely Makes Between $200,000 and $500,000/Year."

Buffett's assistant, Debbie Bosanek, is in the news after sitting in Michelle Obama's box for Tuesday's State of the Union address in which President Obama repeated what Buffett has been saying for years: "Right now, Warren Buffett pays a lower tax rate than his secretary."

It's part of Obama and Buffett's argument for higher tax rates on the nation's wealthiest taxpayers, with the implication that a secretary doesn't get paid all that much and thus it is unfair she is paying a higher tax rate than her extremely wealthy employer.

Gregory appears to be trying to poke a hole in that argument by saying that at her supposed income of $200K to $500K, Bosanek "is scarcely the symbol of unjustice that Obama wishes her to project." 

He assumes Buffett's tax rate is around 15 percent since most of his income comes from capital gains.  Then, looking at IRS data, Gregory finds that:

"... taxpayers earning an adjusted gross income between $100,000 and $200,000 pay an average rate of twelve percent. This is below Buffett’s rate; so she must earn more than that. Taxpayers earning adjusted gross incomes of $200,000 to $500,000, pay an average tax rate of nineteen percent. Therefore Buffett must pay Debbie Bosanek a salary above two hundred thousand."

While we have no idea what Bosanek's compensation actually is, it does appear that Gregory's argument is based on an "apples to oranges" comparison.

Buffett's "office staff" example, as laid out in his New York Times op-ed last fall, is that his total 2010 federal tax bill — "the income tax I paid, as well as payroll taxes paid by me and on my behalf" — was 17.4 percent of his taxable income.

In that op-ed, Buffett says that using the same calculation method, that was a "lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent."

Gregory's conclusion is based on just income tax rates, not payroll taxes, compared to adjusted gross income, not taxable income.

As Forbes personal finance staffer Janet Novack wrote in October, based on a letter Buffett sent to Rep. Tim Huelskamp, Buffett's effective federal tax rate was just 11.06 percent of his AGI.  Novack writes in a comment under Gregory's post that "just based on AGI" Buffett "pays an income tax rate below the rate for those with AGI of $100,000 to $200,000."

While it is possible Buffett pays his assistant a six-digit salary higher than his own $100,000 per year, there does not appear to be any real evidence to support a claim that she "must" be making more than $200,000 a year.

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VIDEO: Warren Buffett sings for Chinese New Year

US billionaire Warren Buffett has appeared singing and playing the ukulele on Chinese state television. The billionaire popped up on CCTV and wished the people of China "a happy new year." The Lunar New Year of the Dragon begins at midnight on Sunday. "Your country has accomplished amazing things, and the best is yet to come," Buffett told the broadcaster. The investor is well respected in China for his financial success.

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TIME MAGAZINE: Interview with Warren Buffett - Jan 2012

The full Warren Buffett Interview with Time Magazine from the Jan 23 Issue will be available at this blog from Friday 20 Jan (NZ Time)

Here is a short taste:


Warren Buffett believes in making money. He believes in fairness. He believes in the ability of government to make people's lives better. But most of all, he believes in luck.

"I've had all this good fortune," Buffett says. "It starts with being born in this country, though. It starts with being born male in 1930."

Genes, luck and birthplace may have helped make Buffett the world's third richest man. But in the past year, his good fortune has also turned him into one of America's most unexpected radicals. He's an ardent capitalist who is demanding higher taxes on the rich and...

Other excerpts from the interview

• TIME.COM: Warren Buffett Ready to Take Republicans on
• TIME.COM: What Warren Buffett Has to Say About Kim Kardashian
• FORBES: Why Warren Buffett Disdains The Private Equity

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DAILY MAIL: Warren Buffett breaks down in tears at mention of his first wife who died of oral cancer

By Meghan Keneally


Last updated at 9:25 PM on 13th January 2012

The affable demeanor of Warren Buffett is not what one might expect when picturing one of the world’s most hard-nosed and successful businessmen.

But neither is the image of him bursting into tears mid-interview when discussing his first wife, Susan, who died of oral cancer in 2004. 


Their relationship was always an unconventional one more akin to Hollywood than that of his hometown of Omaha, Nebraska.

For after marrying in 1952 they stayed as husband and wife despite her moving away in 1977 and him forming a relationship with a close friend of hers. 

Mostly happy guy: Though he is generally upbeat, the subject of his first wife's death brings Mr Buffett to tears

Loving wife: Just two months before she died in 2004, Susan Buffett spoke about her love of Warren and their unbreakable bond

Susan died of the cancer in 2004 and it was talking about her that brought the business titan to tears. 

‘Her death is - it’s just terrible. It’s the only thing that’s really up there,’ Mr Buffett said in an interview with Time Magazine. 

‘I still can’t talk about it,’ he said as he cried for several minutes. 

Mr Buffett met Susan at an early age, when she was headed to college to be his younger sister’s roommate at Northwestern University. 

‘He made some sarcastic quip - I hadn’t even met him - so I made one back and I thought “Who is this jerk?”’ Susan said in a 2004 interview with Charlie Rose. 

The new group: Warren and Astrid Buffett walk with his daughter Susan who hosted their 15-minute wedding ceremony at her Omaha house

Mr Buffett then pursued Susan and she eventually relented, leading to a marriage in 1952. The couple had three children- Susie, Howard, and Peter- and lived in Omaha as Mr Buffett grew his business, Berkshire Hathaway, into one of the country’s biggest investment firms. 

Then, in 1977, Susan decided that she wanted to move away in an effort to pursue her own life and a career as a singer. 

‘You know I would like to have a place where I could have a room of my own,’ she said in the interview with Mr Rose. 

Before she left, Susan told her friend Astrid Menks to check in on Mr Buffett during her absence, saying that his financial savvy did not always translate into social skills.
‘I called Astrid. I said “Astrid, will you take Warren, make him some soup, go over there and look after him?”’ Susan said. 

Bright future: Astrid and Warren got married in 2006, two years after Susan died and almost 30 years after they started their relationship

Life partners: Even after Susan (right) moved to San Francisco in 1977, the couple stayed as close as ever and never split up

Astrid and Mr Buffett then started a relationship, and that was fine by Susan. All three were very aware of their set-up and it seemed to work happily for all parties involved.
They even sent out joint Christmas cards every year with their three names at the bottom. 

Mr Buffett never divorced Susan and only married Astrid two years after her death. 

The most recent tears that Mr Buffett shed over Susan are certainly not the first, as he was known to cry for hours during her prolonged battle with oral cancer. 

Family values: Mr Buffett (center right) is joined by (L-R) son Howard, daughter Susie and son Peter at a Berkshire Hathaway event

One big, happy family: (L-R) Buffett's daughter Susie sits beside her dad and mom Susan at a business function in 1997

During her treatment, when she could not eat solid foods, Mr Buffett would cut himself down to 1,000 calories a day in solidarity, and would sit with her and watch episodes of Frasier in the San Francisco hospital room. 

He could not force himself to attend her funeral because he would become too upset thinking about her and trying to keep a brave face. 

Mr Buffett frequently attributes his success and his political consciousness to Susan, which can still be seen today as he continues to champion the cause of getting the super-wealthy to give back through charity and involvement in government. 

Living arrangements: When Susan moved to San Francisco, Astrid then started a relationship with Mr Buffett and the three were all very happy

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