The Buffett Rule and economic fairness
The Senate this week will take up legislation that would put the so-called "The Buffett Rule" into law, restoring fairness to our tax system by making sure that millionaires and billionaires don't pay a lower effective tax rate than middle-income families.
The "Paying a Fair Share Act" would ensure that multi-million-dollar earners pay at least a 30 percent effective tax rate on their income over $1 million, including capital gains and dividends. The Buffett Rule would limit the degree to which the wealthiest of Americans can take advantage of loopholes and tax rates.
According to the IRS, a full 22,000 households that made more than $1 million in 2009 paid less than 15 percent of their income in income taxes. Nearly 1,500 of them managed to pay no federal income taxes on their million-plus-dollar incomes.
"At the end of the day, it's about fairness," Senator Coons said. "It's about fairness in our tax system, and it's about saying to the average American that no one is above paying their fair share. We're going to have to make some tough choices as a country these next few years as we try to bring our dangerous deficits under control, and it's important that all Americans share in the sacrifice."
The principle gained the moniker "The Buffett Rule" after legendary financier Warren Buffett revealed that because of inequity in the tax system, he was paying a lower effective tax rate than his secretary.
“As both I and Warren Buffett have pointed out many times now," President Obama said last week, "he’s paying a lower tax rate than his secretary. That's not fair. It's not right.”
The White House has developed a simple calculator to help you figure out how many millionaires are presently paying a lower effective tax rate than you. Find out your "Buffett Number" below: