he political centerpiece of President Obama's new push to shrink future deficits is the "Buffett rule," which would amend the federal tax code so that anyone earning at least $1 million a year doesn't pay a lower tax rate than middle-income Americans. The rule is named after billionaire investor Warren Buffett, who says it's unfair that his 17.4 percent tax rate last year was lower than the rate "paid by any of the other 20 people in our office." Obama agreed, saying, "Warren Buffett's secretary shouldn't pay a higher tax rate than Warren Buffett." But the Associated Press, in a "fact check" article, called foul, citing data showing that people who earn at least $1 million a year pay, on average, 29.1 percent of their earnings to Uncle Sam, versus people earning $50,000 to $75,000, who typically pay 15 percent. Is the "Buffett rule" unfounded?
Yes. The White House needs to get its facts straight: "You know things aren't completely right in Obama Land" when the AP starts killing the White House talking points, says William Teach at Pirate's Cove. This should be the death of this little nugget of "class warfare." But unfortunately, since "those on the Left care little for hard facts," we're going to keep hearing about this — even though millionaires indisputably pay much higher tax rates than secretaries, and contribute much more proportionally to the federal coffers.
"Oops: AP finds that secretaries don't pay more than millionaires"
But the AP isn't disproving Obama's point: "Much as it grieves me to rally to the defense of Barack Obama," the AP "seems to deliberately miss the point" of the Buffett rule, says Tom Maguire at Just One Minute. Obama isn't arguing that most millionaires pay lower rates — just that some do. Whether you agree with Obama or not, he's making the "utterly banal liberal" case that the 15 percent capital gains tax rate — which taxes the investment income of wealthy Americans at a lower rate than federal income taxes would — is unfair. And the AP's rebuttal is irrelevant to that point.
"On average, the AP is useless"
And there's still unfairness in the tax code: The 15 percent capital gains rate is "a loophole for hedge managers, pure and simple," says Jonathan Karl at ABC News. That's the main reason Buffett and the other 399 top U.S. earners pay just 18.11 percent of their income to the feds. It's also outrageous that nearly 1,500 millionaires paid no income tax in 2009. But that's a pretty tiny number of people in a nation of 312 million. "Raising their taxes may be the fair thing to do, but it will not bring in much revenue."
"Fact check: The rich, their secretaries, and taxes"
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