Warren Buffett backs his own rule

The billionaire investor Warren Buffett is backing legislation that would codify the so-called "Buffett Rule," which states that those making more than $1 million a year should pay a higher tax rate than middle-class families.

Sen. Sheldon Whitehouse (D-R.I.), who has introduced Buffett Rule legislation in the Senate, announced Buffett's support on Wednesday.

“I have no problem endorsing any large step in the direction of greater fairness in the tax code," Buffett wrote in a letter to Whitehouse, according to the senator's office.

Buffett's support of the legislation comes as President Obama and other Democrats continue to signal that they will make income inequality and tax fairness a key message during this year's election campaign.

It also came on the same day that the White House released its long-awaited corporate tax reform framework, and Mitt Romney, a front-runner for the GOP presidential nomination, unveiled a revamped tax plan.

The president laid out a framework for the Buffett Rule in his State of the Union address last month, saying those making more than $1 million a year should be paying a minimum effective tax rate of 30 percent.

Under Whitehouse's legislation, the rule would be phased in for those making between $1 million and $2 million a year. Rep. Tammy Baldwin, a Democrat running for Wisconsin's open Senate seat this year, has introduced the measure in the House.

“Mr. Buffett has long been a champion on this issue, and I look forward to working with him to make sure that all Americans are paying their fair share toward our nation’s success," Whitehouse said in a statement.

Buffett and certain other wealthy taxpayers currently have a lower tax bill because the U.S. taxes capital gains at a much lower rate than income.

In its new corporate tax framework, the administration also takes aim at the "carried interest" tax break, which allows many private equity executives to pay the capital gains rate of 15 percent on their profit share. The break is one of the reasons Romney was able to pay a roughly 14 percent tax rate in 2010.

Administration officials have said that they broadly back Whitehouse's approach to the Buffett Rule, and that the rule should be part of any overhaul of the individual tax code.

But Washington observers are deeply skeptical that policymakers will be able to finish off any tax reform package, even one limited to the corporate code, this year.

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