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Special Report

Hume: The Warren Buffett Rule

Say this for Warren Buffett -- he knows how to make a big noise with a small point.

A month ago, Buffett argued in The New York Times that our tax code coddles the super rich. He was talking, of course, about a small number of Americans with extremely high net worth whose income is mostly dividends and capital gains from their accumulated wealth. Such income is taxed at about half the rate that is paid on the salaries that most American live on.

True enough, as far it goes. But it doesn't go very far.

For one thing, it ignores the fact that most dividends and capital gains are the result of corporate profits, on which regular income taxes have already been paid. So such money is actually taxed twice.

Indeed, the latest data show that the richest 1 percent of U.S. taxpayers paid 38 percent of the income tax burden and the top 10 percent paid nearly 70 percent.

None of this has stopped the president, with considerable sleight of hand, from citing Buffett in arguing for higher tax rates that would hit countless people who are neither millionaires or billionaires. And Mr. Obama does not mention the other, larger point in the Buffett article, which said job one for Congress should be -- quote -- "to pare down some future promises that even a rich America can't afford. Big money must be saved here."

Buffett talking about entitlement spending, about which Mr. Obama yesterday proposed to do almost nothing.