WASHINGTON President Barack Obama revamped the "Buffett rule" in his State of the Union address, now proposing a 30 percent minimum effective tax rate for taxpayers earning $1 million or more, according to a prepared summary of the speech.
The following is a detailed look at the Buffett rule, its history and arguments for and against it.
* Obama's speech updated the Buffett Rule, which was introduced in September as a way to increase taxes on the wealthy.
* The proposal is named after billionaire investor Warren Buffett, who makes a living off investments that are taxed at a 15 percent rate. Most taxpayers earn their income through wages and salaries, which apply tax rates that go up to 35 percent.
* The Obama administration said it will work to ensure the Buffett rule "is implemented in a way that is equitable, including not disadvantaging individuals who make large charitable contributions," the summary said.
* Buffett published an editorial in August stating he has a 17.4 percent effective tax rate. He argued "the mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes."
* Obama seized on Buffett's revelation and called for greater tax fairness. In October, Senate Democratic leader Harry Reid proposed a 5.6 percent surtax on millionaires to pay for new stimulus provisions.
* Speaking in defense of the Buffett rule, Treasury Secretary Timothy Geithner said in September: "Why should you say to the American people that ... the most fortunate Americans pay a smaller share of their income than does an average, middle-class family? I don't think it makes sense and what we're proposing is something basically fair."
* One argument in favor of lower taxes on long-term capital gains and qualified dividends is to reduce double taxation. When a corporation pays a dividend, for example, that dollar is already taxed at the corporate level. Taxing it again at the individual level is known as double taxation.
* The Obama administration has also called raising rates for investment income for high earners, bringing the rates to 20 percent from the current 15 percent.
* Speaking about the proposed millionaires' surtax in September, Senate Republican leader Mitch McConnell told NBC's Meet the Press: "With regard to (Buffett's) tax rate, if he's feeling guilty about it, I think he should send in a check."
* Other Republicans have introduced legislation in both houses that would modify tax documents to allow payers to donate to the Treasury Department beyond their tax liabilities if they feel they are not paying enough.
(Reporting By Patrick Temple-West; Editing by Doina Chiacu)