President Obama is an advocate of a progressive tax system that ensures an equitable level of taxation for every income bracket. As an example, he cites the case of how his own tax rate is lower than others who make substantially less than him - including his personal secretary. He believes that the current tax code has benefited the wealthy at the expense of the average Americans. A third of the 400 highest income taxpayers in the country paid an average rate of 15 percent or less taxes in 2008. In an effort to rectify this, President Obama has put forth a proposed tax legislation called the Buffett Rule (S.2059, Paying a Fair Share Act of 2012). Named after billionaire Warren Buffett whose idea inspired the proposed legislation, the Buffet Rule seeks to impose a minimum tax rate of 30% on millionaires, who accounts for the top 0.3% of taxpayers in the nation. The Act, however, failed to pass the Senate after failing to obtain the sixty votes needed to send it to the House (51-45).
(Note: For 2011, President Obama and the First lady reported a joint gross income of $789, 674, with a tax rate of 20.5% - amounting to $162,074 - while his secretary, Anita Decker Breckenridge, who makes a little over $95,000, was charged with a higher taxation rate.)
Earlier this February, Obama also signed the Middle Class Tax Relief and Job Creation Act of 2012 which extended a two percent Social Security payroll tax cut and unemployment benefits for between 63 weeks and 73 weeks while preventing a cut in payments to Medicare doctors.
“A return to the American values of fair play and shared responsibility will help us protect our people and our economy. But it should also guide us as we look to pay down our debt and invest in our future.
Right now, our most immediate priority is stopping a tax hike on 160 million working Americans while the recovery is still fragile. People cannot afford losing $40 out of each paycheck this year. There are plenty of ways to get this done. So let's agree right here, right now: No side issues. No drama. Pass the payroll tax cut without delay.
When it comes to the deficit, we've already agreed to more than $2 trillion in cuts and savings. But we need to do more, and that means making choices. Right now, we're poised to spend nearly $1 trillion more on what was supposed to be a temporary tax break for the wealthiest 2 percent of Americans. Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households. Right now, Warren Buffett pays a lower tax rate than his secretary.
Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep our investments in everything else - like education and medical research; a strong military and care for our veterans? Because if we're serious about paying down our debt, we can't do both.
The American people know what the right choice is. So do I. As I told the Speaker this summer, I'm prepared to make more reforms that rein in the long term costs of Medicare and Medicaid, and strengthen Social Security, so long as those programs remain a guarantee of security for seniors.
But in return, we need to change our tax code so that people like me, and an awful lot of Members of Congress, pay our fair share of taxes. Tax reform should follow the Buffett rule: If you make more than $1 million a year, you should not pay less than 30 percent in taxes. And my Republican friend Tom Coburn is right: Washington should stop subsidizing millionaires. In fact, if you're earning a million dollars a year, you shouldn't get special tax subsidies or deductions. On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn't go up. You're the ones struggling with rising costs and stagnant wages. You're the ones who need relief.
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.”
January 24, 2012: State of the Union Address
"Mr. Romney is a patriotic American. He's got a beautiful family. He's been very successful in his life. No, he has. But his basic vision is one in which if wealthy investors like him and folks at the very top are freed up from any kind of regulations, if they are maximizing their profits even if it means polluting more, or offshoring jobs, or avoiding taxes, or busting unions - whatever the strategies - if they're doing well then everybody else is automatically doing well. That's their view.
And that's basically their economic plan. I'm not making this up. It's on Mr. Romney's website. Members of Congress have put forward this plan. They voted for this plan. Their basic idea is we're going to eliminate regulations on everything; we are going to provide a $5 trillion tax cut on top of the Bush tax cuts for the wealthiest Americans; and we're just going to let the market take care of the rest. And the presumption is that everybody here, everybody around the country, will share in this newfound prosperity.
Now, I don't doubt that they will execute this plan if they get elected. Here is the problem: We tried it. We tried it very recently, and it didn’t work. That kind of top-down economics has never worked. That's not how this country was built. It's good for a few, but it doesn’t create that broad-based middle class, and folks having ladders to get into the middle class, that made this country great.
June 26, 2012: President Obama speaking at a campaign event at the Westin Peachtree Plaza Hotel in Atlanta, Georgia
"We are here because of you. This got done because of you; because you called, you emailed, you tweeted your representatives and you demanded action. You made it clear that you wanted to see some common sense in Washington. And because you did, no working American is going to see their taxes go up this year. That's good news. Because of what you did, millions of Americans who are out there still looking for work are going to continue to get help with unemployment insurance. That’s because of you. I called on -- (applause) -- that's worth applauding as well.
You'll remember I called on Congress to pass this middle-class tax cut back in September as part of my broader jobs plan. And for the typical American family, it is a big deal. It means $40 extra in their paycheck. And that $40 helps to pay the rent, the groceries, the rising cost of gas - which is on a lot of people's minds right now. LaRonda Hill - right here - told us how $40 covers the water bill for a month. So this tax cut makes a difference for a lot of families. You can get back over here, Joe. And more people spending more money means more businesses will be able to hire more workers, and the entire economy gets another boost just as the recovery is starting to gain some steam."
February 21, 2012: Remarks by the President Obama on the Middle Class Tax Relief and Job Creation Act of 2012