CINCINNATI, OH (FOX19) - President Obama is traveling the country to make the case that the Americans must pay their fair share, and as you probably know, he is getting some help from billionaire Warren Buffet, the second richest man in America.
"I am also well aware that there are many Republicans who don't believe that we should raise taxes on those who are most fortunate and can best afford it. But here is what every American knows, while most people struggle to make ends meet, a few of the most affluent citizens and the most profitable corporations enjoy the loopholes that the rest of us don't get," President Obama told a joint session of Congress.
That is true. The wealthiest Americans do take advantage of tax loopholes and shelters. But interestingly Warren Buffet wouldn't be heavily impacted by raising the federal income tax rate.
Here's why. Buffet has said that he paid only 17.4% of his income in taxes, a smaller percentage, he says, than his secretary.
But what you may not know is that Mr. Buffett makes most of his money from his investments, in particular from dividends and capital gains that are taxed at a rate of 15%.
Right now, President Obama is talking about raising income tax rates, but not capital gains, because increasing the capital gains tax would cause chaos in the stock market and that would hurt him politically.
"Right now, Warren Buffet pays a lower tax rate than his secretary. An outrage he has asked us to fix. We need a tax code where everyone gets a fair shake. Where everybody pays their fair share," President Obama continued.
But that is not entirely true that the tax code allows the wealthiest Americans to pay less than the middle class.
Here are the facts, according to an investigation by the AP, who looked at numbers from the Tax Policy Center.
In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax.
That, however, was less than 1 percent of the nearly 237,000 returns with incomes above $1 million.
This year, households making more than $1 million will pay an average of 29.1% of their income in federal taxes, including income taxes and payroll taxes.
Households making between $50,000 and $75,000 will pay 15% of their income in federal taxes. Half of the percentage the millionaires pay.
Lower-income households will pay less.
Households making between $40,000 and $50,000 will pay an average of 12.5% of their income in federal taxes.
Households making between $20,000 and $30,000 will pay 5.7%.
Here's what you need to know.
Despite what you may have heard, the facts are, the wealthiest Americans pay the more than anybody else in federal income taxes.
But here is another fact for you.
Warren Buffet, who talks about wanting to pay more in taxes, is the owner of Berkshire Hathaway, which is the eighth-largest public company in the world. Berkshire Hathaway is behind on its taxes.
The New York Post reports that the failure by Buffet's own company to pay its taxes, goes all the way back to 2002.
And only now, the company is negotiating how much it will pay.
Before talking about the need for people to pay their fair share, at least pay what you already owe.
And that is Reality Check.