FROM: THE WHITE HOUSE
The Buffett Rule Asks the Wealthiest to Pay Their Fair Share
Megan Slack April 10, 2012
Nearly one-quarter of all millionaires (about 55,000 individuals) pay a lower tax rate than millions of middle-class families. Warren Buffett has famously said that he pays a lower tax rate than his secretary, and he agrees that isn’t fair. To reform our tax system, which is currently tilted in favor of very high-income households, President Obama has proposed a basic principle of tax fairness called the Buffett Rule.
And, using the average tax rate to tell the story actually, like in the chart above, masks the fact that some high-income Americans pay extraordinarily low tax rates. A full 22,000 households that made more than $1 million in 2009 paid less than 15 percent of their income in income taxes. And the top 400 richest Americans—all making over $110 million a year—paid an average of 18 percent of their income in income taxes in 2008, but one in three of them paid less than 15 percent.
It is these high-income taxpayers that the Buffett Rule is meant to address by limiting the degree to which they can take advantage of loopholes and tax expenditures. For middle class families making less than $250,000 a year—families for whom tax rates have barely budged in the last 50 years—taxes should not go up.
