By John Palm, Editor
GCN Live.com
The so called “Buffett rule,” introduced Monday by President Obama as part of his deficit plan, appears to be more the exception than the rule.
President Barack Obama meets with Warren Buffett, Chairman of Berkshire Hathaway.
Courtesy Newscom
“Middle-class families shouldn’t pay higher taxes than millionaires and billionaires,” said President Obama in Monday’s speech. “That’s pretty straightforward. It’s hard to argue against that.”
According to an Associate Press report by Stephen Ohlemacher, “The data tell a different story.”
Citing private and government data, the AP reports that the wealthy pay a higher rate and contribute a much larger share of the overall filed federal taxes.
Here are some of the statistics the AP found:
- In 2009, 1,470 households filed tax returns with incomes above $1 million and paid no federal income taxes. However, this is only one percent of the 237,000 returns with incomes above $1 million.
- This year households making more than $1 million will pay 29.1 percent of their income in federal taxes, citing numbers from the Tax Policy Center; households between $50,000 and $70,000 will pay 15 percent, $40,000 to $50,000 will pay 12.5 percent, and $20,000 to $30,000 will pay 5.7 percent.
The recent buzz regarding the amount the wealthy pay in taxes has stemmed from Warren Buffett’s comments about him paying less taxes than his employees. The “Buffett rule” has since been coined to describe the desire to ensure the wealthy pay higher taxes than the middle and lower classes.
The AP report speculates that investors like Buffett may pay lower taxes due to being taxed on their investment income – currently the top tax for dividends and capital gains is 15 percent. In addition, the tax code is “riddled” with more than $1 trillion in deductions, exemptions, and credits for anyone to take advantage of.