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Tuesday, April 10, 2012

White House: The Buffett Rule -- A Basic Principle of Tax Fairness

Buffett CoverThe White House today released The Buffett Rule: A Basic Principle of Tax Fairness:

The Buffett Rule is the basic principle that no household making over $1 million annually should pay a smaller share of their income in taxes than middle‐class families pay. Warren Buffett has famously stated that he pays a lower tax rate than his secretary, but as this report documents this situation is not uncommon. This situation is the result of decades of the tax system being tilted in favor of high‐income households at the expense of the middle class. Not only is this unfair, it can also be economically inefficient by providing opportunities for tax planning and distorting decisions. The President has proposed the Buffett Rule as a basic rule of tax fairness that should be met in tax reform. To achieve this principle, the President has proposed that no millionaire pay less than 30 percent of their income in taxes.

  • The average tax rate paid by the very highest-income Americans has fallen to nearly the lowest rate in over 50 years
  • Average tax rates for the highest income Americans have plummeted even as their incomes have skyrocketed
  • Some of the richest Americans pay extraordinarily low tax rates—as they hire lawyers and accountants to take particular advantage of loopholes and tax expenditures
  • Many high-income Americans are paying less in taxes than middle class Americans in taxes

Press and blogosphere commentary:

http://taxprof.typepad.com/taxprof_blog/2012/04/white-house-the-.html

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