The latest National Review includes this brief synopsis of President Obama’s Buffett Rule:
President Obama has reiterated his call for a tax hike based on the so-called Buffett Rule, which relies on an oft-repeated and ofte-debunked falsehood: that wealthy Americans pay lower tax rates than members of the middle class. Families earning $40,000 to $50,000 pay an effective federal income-tax rate of about 3.2 percent, while Americans with incomes of $1 million a year or more pay on average nearly ten times that, around 30 percent; about 10 percent of the very wealthy pay 35 percent or more, and another 10 percent pay 24 percent or less. It is this last group that Democrats are targeting. Because leaders of both parties have long desired to encourage savings — the lifeblood of our economy and the surest path to family prosperity — long-term investments are taxed at a preferential rate (usually 15 percent), as a result of which retirees and professional investors who make most or all of their income from capital gains rather than from salaries and bonuses have a lower effective tax rate.
Their numbers are small, but they are high-profile targets of Democratic class-envy rhetoric, which is what Obama’s Buffett Rule speech was really about — even the president’s most enthusiastic supporters admit the proposal has no chance of making it through Congress. A serious tax-reform plan would be a welcome development, but President Obama has only cheap stunts to offer.