The “Buffett Rule” refers to an idea attributed to investor Warren Buffett, one of the wealthiest men in America, that the rich shouldn’t pay a lower tax rate than the middle class. People who think the rich are being cruelly burdened may be surprised to learn that because of special tax rates and loopholes this is often the case. Currently, for example, a large part of investment income is taxed at a maximum rate of just 15%.
Back in 1985, President Reagan also proposed to make sure the wealthy paid their fair share. Here’s an interesting very short video showing Obama and Reagan saying almost exactly the same thing:
“Do you think the millionaire should pay more in taxes than the bus driver or less?” Reagan asked.
Incidentally, for most of Reagan’s time in office, the top tax rate was substantially higher than anything Obama has proposed. As a number of Republicans have said, Reagan probably couldn’t get nominated by today’s GOP.
(Aside: The next time someone tells you high-income Americans are being gouged on taxes and recites the figure that the top 20% pay almost 70% of all federal income taxes, you might want to remind them that the Social Security tax drops to zero on income over $106,800 a year, and that the top 10% in the U.S. rake in almost exactly half of all personal income.)