State of the Union to highlight Buffett rule as secretary sits in First Lady's box

By: Stephanie Condon
Topics: Economy ,; Campaign 2012 ,; Obama Administration

(Credit: Jemal Countess/Getty Images for Time Inc.)

Just hours after his potential Republican rival Mitt Romney revealed he paid a 14.5 percent tax rate on his $42 million in earnings in the past two years, President Obama on Tuesday night plans to use the ultimate platform -- his State of the Union address -- to charge that it's wrong to let millionaires pay so little into the system.

In his speech before a joint session of Congress tonight, Mr. Obama will offer more details of the so-called "Buffett Rule," according to White House Communications Director Dan Pfeiffer.

Last year, Mr. Obama proposed a measure he dubbed the "Buffett Rule" -- named for billionaire investor Warren Buffett -- to compel those making $1 million or more a year to pay a rate no lower than what middle income Americans pay. Taxpayers making $1 million or more often make their money through investment, or unearned, income, which is taxed at a lower rate than wage, or earned, income. Most Americans make their income through wages, which are taxed on a sliding scale that tops out at 35 percent.

The president named his proposed rule after Buffett after the Berkshire Hathaway chairman began publicly decrying the fact that in 2010, he paid only 17.4 percent of his taxable income to the government -- even though others in his office, including his secretary, paid a much higher rate.

To further drive home the message in tonight's speech, Buffett's secretary Debbie Bosanek, will be in First Lady Michelle Obama's box.

Mr. Obama has said that his remarks will focus on "rebuilding an economy where hard work pays off and responsibility is rewarded - and an America where everybody gets a fair shot, everyone does their fair share, and everybody plays by the same set of rules."

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Stephanie Condon
Stephanie Condon is a political reporter for CBSNews.com.
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by wfw3536 January 24, 2012 4:24 PM EST: When is Buffet going to step up and and pay the government more than what he is responsible for in taxes. Why should anyone, rich or poor pay a penney more than they have to the why this administrations wastes money. A good example is Solyndra, over 500 billion when Obama and his administration knew they would be going bankrupt. Oh, and how convenient that they didn't announce the bankruptcy until after the 2010 election.; Reply to this comment


by bgpa324 January 24, 2012 3:56 PM EST: i THINK MAYBE THE MEDIA SHOULD CALL FOR THE LADY,S TAX RETURN TO BE MADE PUBLIC AFTER ALL SHE IS ALLOWING HER NAME TO BE USED IN A POLITICAL CAMPAIGN SHE AND WARREN COULD PULISH THEIRS TOGETHER I AM SURE THEY GAVE WAY MORE TO CHARITY THAN MAYBE ROMNEY.; Reply to this comment


by lagunagal January 24, 2012 3:49 PM EST: If I want works of fiction I'll thumb through a book on my iPad. My wager is less than 2 million American's tune in to this because any child can see how Obama has attempted a head-on with our economy and our people as a whole, can we not? I see this anxiety ridden misery in my home, my neighborhood and my town twice a day when I go and return from work yet Obama says I'm not only racist but I'm seeing things? No, I want nothing to do with this man but most importantly this would be 35 minutes I'll never get back. Tell it walkin Barack......; Reply to this comment


by bgpa324 January 24, 2012 3:18 PM EST: He sounds like the typical cheap dem , HE DIDNT GIVE HIS SEC A BONUS WHAT A CHEAP SOB.I BELIEVE THAT IF YOU TAKE MILLIONS IN BONUS AND STOCK OPTIONS FROM A COMPANY, THAT YOU SHOULD BE REQUIRED TO TAKE AT LEAST 50% OF THAT AMOUNT IN WAGES.; Reply to this comment

by jb11 January 24, 2012 2:49 PM EST

a political pawn being used for propaganda, disgusting. class warfare may win the election, but it won't fix the economy

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by drm10 January 24, 2012 3:51 PM EST: I do not buy it one bit about his Secretary, if she is going to insert her into the political process then we have every right to demand she release her tax records to prove exactly what she is or is not paying


by drm10 January 24, 2012 2:21 PM EST: The Buffett rule is so dishonest. The IRS recognizes different types of income. Earned income (salary) is taxed using a progressive rate, starting and 10% and going up to 35% for higher wages. This income is also subject to social security/medicare taxes. There is also capital gains income and unearned income (like dividends or interest) from investments. These rates are taxed at a flat rate of I believe 15%. Keep in mind that dividend income has already been taxed because dividends come from profit made by companies and this profit is taxed at 35%. So the 15% tax paid by buffet on his dividends is actually much higher. Quick example, corp A makes $100 profit, they are taxed at 35%, so $65 remains. Corp A sends Buffet $65 as dividend and this is taxed at 15%, so he gets to keep $55.25. So the $100 profit results in income to Buffet of $55.25, which is an effective tax rate of 44.75%. This 44.75% is MUCH, MUCH higher than Buffet's secretary pays. Time to wise up people and learn the facts about taxes and quit falling for Barak's cute little sound bites that have no basis in fact.; Reply to this comment


by RealiteBites January 24, 2012 2:07 PM EST: Barack is NEVER going to raise taxes under his watch - his number one priority is saving his own job. And raising taxes, when he hasn't been successful at revitalizing the economy, would just give too much political fodder to the opposition.

I can just picture corporate big-wigs coming to the White House, or meeting with Barack at fundraisers, with them expressing concern about the possibility that he might raise taxes on them. And I can just picture Barack putting his hand on their back and smiling warmly, reassuring them that he would NEVER raise taxes while the economy is in the shape that it is, and that the Warren Buffet's secretary campaign angle is for FAR in the future.

He's NEVER going to raise taxes on the rich. And you know what that means - Bob Shieffer is going to continue to blow his gasket about how the extremists won't compromise. Oh Bob ...; Reply to this comment


by credibility2 January 24, 2012 1:45 PM EST: Buffet's secretary probably makes a lot more than the average worker does. And I'm sure she's taking advantage of as many legal deductions to lower her overall income tax percentage. Buffet doesn't pay his fair share of taxes either, but is right there in the front of he line taking advantage of legal deductions to avoid tax consequences on his capital gains. I don't like the fact that as a person without kids, I have to pay more in taxes than those who do have kids, but I realize that that is part of the risks one takes. The more risks, like investments or having kids, the less taxes one has to pay.; Reply to this comment

by ricknettles January 24, 2012 12:54 PM EST

Instead of calling this 'the Buffett rule' tonight, how about we introduce a new name and dare the GOP to oppose a revision to the tax code for high earners: the Reagan Rule. In 1986 Reagan agreed with Democrats that the superrich paying less in taxes than those with ordinary income was unfair and raised the rate on capital gains from 20 to 28 percent.

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by drm10 January 24, 2012 2:25 PM EST: let's make a deal on tax rates. I will agree to return to the tax rates under Reagan (which was a max of 28% for wages) if you agree to return to the budget of Reagan, adjusted for inflation and population growth. Sounds like a fair deal, are you up for that? I would guess you will not be for this deal for liberals want to return to higher tax rates of past presidents but DO NOT WANT TO RETURN to the lower spending levels of past Presidents. You put this deal on the table and every Republican would accept it

by RealiteBites January 24, 2012 11:57 AM EST

Well, things have gotten really out of balance because of Shrub and the rest of the Rethugs.

BUT Barack's AGREED to extend the Bush tax cuts for three years straight!

Let's not forget that Baracks' a double-talker who has the capacity to say one thing AS he's doing the complete opposite. It's a way for him to play both sides against the middle and be everybody's champion.

He could have held out and insisted the taxes on the rich expire - I think he chose not to because he didn't want to raise the ire of powerful corporate interests.

All these politicians are in bed with Wall Street and corporate America. ALL of them. Anybody that thinks Barack would ever cross corporate America is getting played for a fool ...

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