The Complications and Misinformation of the 'Buffett Rule'

During his Rose Garden speech [Monday], President Obama once again fueled the general misperception that people who pay the 15 percent tax rate on their capital gains and dividend income are paying a lower rate than salaried workers who pay at the individual rate (which ranges from 10 percent to 35 percent).

The reality is that capital gains and dividends are taxed at a lower rate at the individual level because this income has already been taxed at 35 percent at the corporate level before it was distributed to shareholders. Both Mr. Obama and his tax advisor Warren Buffett seem unaware that the U.S. has the 4th highest overall tax rate on dividend income among the largest industrialized countries in the OECD at 52.1 percent. Only Denmark (56.5 percent), France (57.8 percent) and the United Kingdom (54 percent) tax dividends at a higher rate.
As explained by the Tax Foundation