Warren Buffet and Barack Obama (Credit: AP)
If the Buffett Rule was enforced today, President Barack Obama and his wife Michelle wouldn’t be impacted by it based on their family’s tax return released by the White House. The couple earned less than $1 million in 2011, which is the minimum amount that taxpayers would need to earn to pay more under the tax proposal.
What is the Buffett Rule?
The Buffett Rule, named for billionaire investor Warren Buffett, is a proposal supported by President Barack Obama that seeks to raise taxes on individuals who fall into the category of the nation’s top earners.
According to the rule, taxpayers earning at least $2 million in adjusted gross income would pay a minimum rate of 30 percent, while those who earn between $1 million to $2 million would pay higher taxes than lower earners based on a sliding scale.
The Buffett Rule was set forth after Warren Buffett announced that he had only paid a 17.4 percent federal income tax rate on his 2010 tax return, which was lower than anyone else working in his office. Rich taxpayers have access to tax loopholes that middle and low-income taxpayers don’t, which is why he is pushing for the wealthy to make greater tax contributions.
President Barack Obama at a 20-Percent Federal Tax Rate
Today, the White House announced that President Barack Obama and Michelle Obama finished their tax returns for 2011 and paid a 20.5-percent federal tax rate on $789,674 in adjusted gross income. As a result, their income would not be subject to the Buffett Rule if it was a part of today’s tax code.
Vice President Joseph Biden would have also escaped the rule this year. He and his wife Jill reported paying $87,900 in taxes on $379,035 in adjusted gross income for a 23.2 percent rate.
In previous years, the Obamas would have been impacted by the Buffett Rule with $1.7 million in 2010 income and a whopping $5.5 million in 2009 income. But the Obama, who is pushing the tax proposal as a part of his re-election campaign, is reportedly fine with any increases the rule may bring.
As noted by White House press secretary Jay Carney in a blog post, “Under the president’s own tax proposals, including the expiration of the high-income tax cuts and limitations on the value of tax preferences for high-income households, he would pay more in taxes while ensuring we cut taxes for the middle class and those trying to get in it.”