The idea that secretaries are paying more in taxes than their billionaire bosses is certainly sensational. It's also, for the most part, false. Under America's progressive tax structure, the overwhelming majority of high-income earners pay the top rate of 35 percent. True, there are some minor exceptions, such as the case of Buffet. Not unlike Mitt Romney, most of Buffet's income comes from investments like capital gains and dividends, which are taxed at 15 percent. That might seem to be a lower rate that Buffet's secretary pays. In reality, however, most investment income is taxed twice. For most high-earners, the 15 percent capital gains tax on investments comes in addition to a corporate tax rate of 35 percent. Altogether, the effective tax rate for investment income in America is a sizeable 44.75 percent. Given that low-income earners pay little to nothing in taxes, it should come as no surprise that, according to the Tax Policy Center, a full 60 percent of Americans pay a lower effective rate than Buffett does. That includes most secretaries.
