Apparently the Obama campaign believes the president can improve his reelection fortunes by touting the “Buffett Rule.” Today, squeezed between two high-dollar campaign fundraisers, the president will travel to Florida Atlantic University in Boca Raton for an official (read, taxpayers cover a portion of the president’s travel costs) event on the economy, where he will make the case for the Buffett Rule. Again.
Of course, University of Michigan economics professor Mark Perry looked at IRS data and found out that the anecdote of Buffett paying a lower tax rate than his secretary is strikingly unrepresentative. Because so much of Buffett’s income comes from investments, most of the money he makes is taxed at the rate for capital gains, which varies for investments owned less for a year but is only 15 percent for those owned for more than a year. Thus, Buffett is paying a rate of only 15 percent on large chunks of the money he makes each year.
The income tax rate varies based upon income level, from 10 percent for those with the lowest incomes to 35 percent for those in the highest brackets. For many of the richest Americans, they make their money through actual income, not investments, and they pay a much higher rate than Buffett does.
Perry looked at IRS data and found “a secretary earning $50,000 would be paying an average federal tax rate of about 11 percent, compared to the 26.3 percent tax rate on the “super-rich” earning $10 million or more. Any CEO earning income above $200,000 would be paying federal income taxes at a rate of at least 24.6 percent, or more than twice the rate of a secretary earning $50,000.”
The Tax Policy Center has some updated numbers with 2011 data.
When you add up all federal taxes, those making between $40,000 and $50,000 per year pay an average of 12.6 percent.
Those making between $100,000 and $200,000 per year pay an average of 20.1 percent.
Those making between $500,000 and $1 million of 28.4 percent.
Those making $1 million or more per year pay an average of 31.4 percent.
FactCheck.org notes, “The administration’s figures also show that less than 1 in 10 of these high-income taxpayers paid less than a 15 percent income-tax rate.”
But hey, what else does the president have to talk about in a state like Florida? His sterling record of job creation? The fantastic housing market? Gas prices, and how they’ll help Florida’s tourism industry? Can he tell Florida’s Jewish community about how well he gets along with Bibi Netanyahu and how secure Israel feels in the face of the threat from Iran? His oh-so-popular health care law that may or may not be constitutional? How well our decision to provide food aid to North Korea is working out now that they’re test-firing another missile in a so-called “satellite launch”?
Nope. He can’t talk about any of those. So he has to suggest to Americans that their lives would be better if those greedy rich people – er, not the ones attending those high-dollar fundraisers, obviously – just paid more in taxes.