ECONOMY - Good Idea on Tax Rates, Millionare's = Middle-Income's

"Obama Tax Plan Would Ask More of Millionaires" by JACKIE CALMES, New York Times 9/17/2011

Excerpt

President Obama on Monday will call for a new minimum tax rate for individuals making more than $1 million a year to ensure that they pay at least the same percentage of their earnings as middle-income taxpayers, according to administration officials.

With a special joint Congressional committee starting work to reach a bipartisan budget deal by late November, the proposal adds a new and populist feature to Mr. Obama’s effort to raise the political pressure on Republicans to agree to higher revenues from the wealthy in return for Democrats’ support of future cuts from Medicare and Medicaid.

Mr. Obama, in a bit of political salesmanship, will call his proposal the “Buffett Rule,” in a reference to Warren E. Buffett, the billionaire investor who has complained repeatedly that the richest Americans generally pay a smaller share of their income in federal taxes than do middle-income workers, because investment gains are taxed at a lower rate than wages.

Mr. Obama will not specify a rate or other details, and it is unclear how much revenue his plan would raise. But his idea of a millionaires’ minimum tax will be prominent in the broad plan for long-term deficit reduction that he will outline at the White House on Monday.

Mr. Obama’s proposal is certain to draw opposition from Republicans, who have staunchly opposed raising taxes on the affluent because, they say, it would discourage investment. It could also invite scrutiny from some economists who have disputed Mr. Buffett’s assertion that the megarich pay a lower tax rate over all. Mr. Buffett’s critics say many of the rich actually make more from wages than from investments.

So economists who disagree with Buffett say "the rich actually make more from wages than from investments" and this is a logical reason NOT to raise their tax-rate?!

The tax-rate is on INCOME which includes wages, which makes the objection illogical. A tax-rate increase would just mean a bigger portion of the tax they pay would be on their wages and less on investments.

The likely reason Mr. Buffett believes what he asserts is all the tax breaks the megarich can take advantage of, that is not available to the average Joe. These effectively lower their tax-rate.