Warren Buffett pays a lower tax rate than his secretary.\u00a0 Meanwhile, over the last 30 years, the tax rates for middle class families have barely budged. That doesn\u2019t reflect our values of fairness as a nation — and that\u2019s why the President has proposed the Buffett Rule.<\/p>\n
The President believes we should build an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.\u00a0 It\u2019s simple: if you make more than $1 million a year, you should pay at least the same percentage of your income in taxes as middle class families do.\u00a0On the other hand, if you make under $250,000 a year \u2013 like 98 percent of American families do \u2013 your taxes shouldn\u2019t go up.<\/p>\n
Today the White House released a report, The Buffett Rule: A Basic Principal of Tax Fairness.\u00a0 This report highlights the need for Congress to take action and pass the Buffett Rule.\u00a0 Here are some of the highlights from the report:<\/p>\n
The average tax rate paid by the very highest-income Americans has fallen to nearly the lowest rate in over 50 years. The wealthiest 1-in-1,000 taxpayers pay barely a quarter of their income in Federal income and payroll taxes today\u2014half of what they would have contributed in 1960. And, the top 400 richest Americans\u2014all making over $110 million\u2014paid only 18 percent of their income in income taxes in 2008.<\/p>\n
Average tax rates for the highest income Americans have plummeted even as their incomes have skyrocketed. Since 1979 the average after-tax income of the very wealthiest Americans \u2013 the top 1 percent \u2013 has risen nearly four-fold. Over the same period, the middle sixty percent of Americans saw their incomes rise just 40 percent. The typical CEO who used to earn about 30 times more than his or her worker now earns 110 times more.<\/p>\n
Some of the richest Americans pay extraordinarily low tax rates\u2014as they hire lawyers and accountants to take particular advantage of loopholes and tax expenditures. The average tax rate masks the fact that some high-income Americans pay near their statutory tax rate, while others take advantage of tax expenditures and loopholes to pay extraordinarily low rates\u2014and it is these high-income taxpayers that the Buffett rule is meant to address .<\/p>\n
Of millionaires in 2009, a full 22,000 households making more than $1 million annually paid less than 15 percent of their income in income taxes \u2014 and 1,470 managed to paid no federal income taxes on their million-plus-dollar incomes, according to IRS data.<\/p>\n
Of the 400 highest income Americans, one out of every three in this group of the most financially fortunate Americans paid less than 15 percent of their income in income taxes in 2008.<\/p>\n
Many high-income Americans are paying less in taxes than middle class Americans in taxes. Nearly one-quarter of all millionaires (about 55,000 taxpayers) face a tax rate that is lower than more than millions of middle-income taxpayers. This is fundamentally unfair.<\/p>\n