Warren Buffet’s secretary was in the spotlight at President Obama’s State of the Union Address after Mr. Buffet repeated his comments that she is the one paying the higher taxes. I know that Mr. Obama believes this is unfair, because I received a four page letter (perhaps robo-signed) that asks the question, “Do you think it is fair that Warren Buffet’s secretary pays a higher tax rate than Warren Buffet?” He then gives the answer, “I don’t and neither does Mr. Buffet.”

Mr. Buffet believes he and other millionaires should paying higher taxes on their individual returns, but he apparently doesn’t feel the same about Berkshire Hathaway. He owns a big share of that company, and it pays considerable amounts in corporate taxes. However, the company’s annual report discusses the running dispute it has with the IRS about how much it owes. This isn’t new; the IRS has been actively contesting whether Berkshire Hathaway is paying enough for almost a decade.

There are several interesting factors at play in this story. First, do his secretary and everyone else in Mr. Buffet’s office really pay more than Buffet? The answer is obviously no. The secretary does pay a higher rate on her estimated $200,000 salary, although I can’t find how she is paying the reported 35.8 percent of her income. There is a link to a tax calculator that shows a single person with taxable income of $200,000 would pay $50,897 in federal taxes, or 25.45%. A married person filing a joint return with the same taxable income would pay $44,070 or 22.03%. Perhaps Nebraska has really high state taxes or Omaha adds several percentage points for some sort of municipal tax.

Buffet reportedly pays federal income taxes at 17.4 percent of his taxable income, because much of his income is from capital gains that are taxed at a maximum of 15%. The disparity between his tax rates and those for his secretary is what has created outrage and earned her the adoration of those who champion higher taxes for millionaires. I haven’t seen it mentioned in many places that Mr. Buffet pays an estimated seven million dollars on his personal return, which my rudimentary math tells me that he reported about 40 million dollars of income. He wouldn’t have to wait for tax laws to be changed to address his outrage that he pays a lower tax rate than his secretary. He could simply donate another 7 million dollars to the government and there wouldn’t be an issue that needs national attention. I don’t know whether he could claim that donation to reduce his taxable income for the next year. Perhaps he doesn’t really want to send the IRS more of his personal income because his 23% share of the Berkshire Hathaway disputed corporate taxes is over five billion dollars.

It isn’t a surprise that Mr. Buffet is a big fan of Mr. Obama. The President’s decision to cancel the Keystone XL pipeline provides a big boost to earnings of Berkshire Hathaway. The pipeline was to transport oil from the Bakken oil fields in the Dakotas along with Canadian oil, but now much of that oil will have to be moved in railway tank cars operated by Burlington Northern and Santa Fe Railway Company. Berkshire Hathaway already owns 22% of that company and has an offer to buy the rest.

Let’s think about Keystone XL for a bit. The pipeline had been cleared as having minimal environmental impact in a three year study. It would have provided jobs to people making the pipe and installing it. It would have brought large quantities of oil to U.S. refineries that didn’t originate in countries that don’t like us very much. It also would have increased the amount of Bakken oil that would also move to those refineries. Apparently none of those positives would have justified irritating the people who call themselves environmentalists.