The tax proposal was one of several challenges the president, in his third State of the Union, put forth to a bitterly divided Congress in an election year. Those challenges included calls for incentives to expand clean energy, help homeowners take advantage of historically low interest rates, and rebuild the country’s infrastructure.
The 30 percent minimum tax idea not only fundamentally sets Obama apart from the Republican field, it puts him in the middle of a roiling national debate over wealth and power inequalities. Hours earlier, GOP contender Mitt Romney released his 2010 federal income taxes, showing he paid only about 15 percent on about $21 million in income, mostly investments. The rate is lower than that of many middle-income Americans.
Those Americans were the intended recipients of Obama’s pitch.
“You’re the ones struggling with rising costs and stagnant wages. You’re the ones who need relief,’’ said the president. He then alluded to what has become known as the “Buffett Rule.’’
“Now, you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.’’
The “Buffett Rule’’ was coined after billionaire investor Warren Buffett criticized the system for allowing him to pay a lower rate than his longtime secretary, Debbie Bosanek. To drive home the point, Obama’s advisers had Bosanek seated in first lady Michelle Obama’s box, along with other invited guests.
The president has spoken of the Buffett Rule in general terms many times; this was the first time he attached a minimum tax rate to the principle.
The top tax rate for the wealthiest Americans is 35 percent, but the vast majority pay much less than that. For those like Romney who earn a bulk of their money through investments, which are mainly taxed at 15 percent, rather than wages, the effective rate plummets.
