100,000 Reasons To Support The "Buffett Rule"

October 13, 2011 4:34 pm ET — Alan Pyke

A few weeks back, Republicans pounced on misleading press reports to claim that the entire premise of President Obama's proposed "Buffett Rule" was invalid.

Republicans on the House Ways & Means Committee claimed that "every bit of tax data proves" the president wrong, and the RNC's research department told the world that "Fact Checks Find Obama's Claim About The Buffett Rule To Be Inaccurate." But these supposed debunks were premised on a false depiction of the Obama-Buffett thesis. By writing about average taxation, rather than the individual cases of unfairness referenced by the White House, Republicans were sidestepping the reality that many, many millionaires are able to pay lower total tax rates than the workers they employ.

A Congressional Research Service report released today confirms that about a hundred thousand U.S. millionaires pay a lower effective tax rate than millions of middle-income Americans:

Among millionaires (see the last two categories in the figure), the average tax rate is almost 30% with about 10% facing a tax rate greater than 35%. Furthermore, another 10% face a tax rate below 24%. Comparing millionaires with moderate-income taxpayers (with AGI less than $100,000), roughly one-quarter of all millionaires (about 94,500 taxpayers) face a tax rate that is lower than the tax rate faced by 10.4 million moderate-income taxpayers (10% of the moderate income taxpayers), which would be considered a violation of the Buffett rule but not to the extent alluded to by Mr. Buffett.

RNC Chairman Reince Priebus and the Ways & Means Committee's GOP members don't appear to be in any hurry to correct their gleeful and erroneous condemnations of the Buffett Rule proposal.

Neither do the journalists whose work was the basis for the RNC's claim. This ABC News article claiming that "not that many" millionaires "may lower tax rates than middle-income families" does not carry a correction, leaving readers to conclude that 94,500 fits ABC's definition of "not that many." Same goes for this Wall Street Journal piece and its accompanying table declaring "Very Few Buffetts." An Associated Press "FACT CHECK" item concluding that millionaires "already are" paying higher rates than their subordinates is also unchanged.

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