On Tuesday afternoon President Obama took a break from fundraising in Florida to make his pitch for the 'Buffett Rule', a proposal that would see the country's wealthiest pay at least 30% of their income in taxes.
The legislation is named after America's second richest person, maverick investor Warren Buffett, who has long complained that he and his fellow billionaires and millionaires are paying a far lower tax rate than the average middle-class family.
"Right now, the share of our national income flowing to the top 1% has climbed to levels last seen in the 1920s," Obama told a cheering chorus of Florida Atlantic University students in Boca Raton, Fla. "And yet those same people are also paying taxes at one of the lowest rates in 50 years. You might have heard this, but Warren Buffett is paying a lower tax rate than his secretary."
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"That’s wrong," he said. "It isn’t fair. And it’s time for us to choose which direction we want to go in as a country. Do we want to keep giving tax breaks to the wealthiest Americans like me, or Warren Buffett, or Bill Gates – people who don’t need them and never asked for them? Or do we want to keep investing in things that will grow our economy and keep us secure? That’s the choice."
As you might imagine, the Buffett Rule has had a mixed reception among the Forbes 400, many of whom are just fine with an average tax rate of 18%, thank you very much. Last week, media mogul Barry Diller called Buffett's tax dictum "irrelevant" during a radio interview.
Then there are the Koch brothers, the ultimate free-market, flat-tax champions; Charles Koch came out against Buffett last year, saying his investments do more good for society than more taxes would.
Forbes columnist and investment guru Ken Fisher strongly opposes the plan, as he explained last year in a magazine interview. "My advice to Mr. Buffett is to stick to what he does best," said the billionaire. "If you took a vote of the Forbes 400 I am pretty sure they'd say no to raising taxes on cap gains."
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Well, there are a handful of billionaires who are on board with the Buffett Rule, and have come out publicly to say so. One of the most outspoken advocates of raising taxes on the rich: Buffett's friend and the only American with more money in the bank, Bill Gates.
In fact, Gates' father was the public face of Washington State's ballot initiative 1098, which would have slapped a 5% tax on income over $400,000 per couple and a 9% levy on income over $1 million. It ultimately failed, but Gates remains a proponent of higher taxes for the rich, telling the BBC in January that it's "just justice" for him and his fellow billionaires to pay a greater percentage to the state.
Gates and Buffett are joined by a roster of Forbes billionaires in support of the proposal, including private equity giants, an arts donor and a sports team owner.
Billionaire investor Warren Buffett wants to pay more taxes, saying the 11% effective rate he pays is far lower than that paid by his secretary. The 'Buffett Rule' proposal is named after the Oracle of Omaha, America's second richest person.
Microsoft tycoon Bill Gates is a longtime friend of Buffett's -- they originated the Giving Pledge together, enlisting other billionaires to agree to give the bulk of their wealth to charity during their lifetime. Gates has also come out in support of higher taxes for the very wealthy, saying it'd be "just justice" for him to pay more.
Billionaire arts philanthropist Eli Broad told Forbes last year that he backs the Buffett Rule. "Those of us who have gained great success have an obligation to pay more taxes," he said. "We've been coddled long enough and have tax breaks that 99.9% of the public don't have, and it's not fair."
New York's billionaire "Mayor Mike" has said that raising taxes is only fair -- and not just for the super-rich, but for everyone, depending on income levels. "Everybody’s in this country together," he said on MSNBC’s Morning Joe in November. “Everybody pays taxes. We have a graduated income tax so those that have more, pay more as a percentage…[those who pay] all benefit and should understand it’s their money [too].”
Dallas Mavericks owner Mark Cuban gives the Buffett Rule a "resounding yes", according to an interview with Salon.com in October. He took part in the website's Patriotic Billionaire Challenge and was one of eight Forbes 400 members to respond positively to Salon's questions.
Click here to see more super-rich proponents of the Buffett Rule.
- Warren Buffett