The Buffett Rule Explained

http://www.whitehouse.gov/economy/buffett-rule

What's the deal with our current tax system?

Under the current U.S. tax system, a number of millionaires pay a smaller percentage of their income in taxes than a significant proportion of middle class families. Warren Buffett, for example, pays a lower effective tax rate than his secretary, and that’s not fair.

A full 22,000 households that made more than $1 million in 2009 paid less than 15 percent of their income in income taxes — and 1,470 managed to pay no federal income taxes on their million-plus-dollar incomes, according to the IRS.

And, the very wealthiest American households are paying nearly the lowest tax rate in 50 years— some are paying just half of the federal income tax that top income earners paid in 1960. But the average tax rate for middle class families has barely budged. The middle 20 percent of households paid 14 percent of their incomes in 1960, and 16 percent in 2010.