Remember the fight last year over extending the Bush tax cuts? Well here we are again. But instead of the Bush tax cuts we have the "Buffett Tax," outlined by President Obama on Monday.
"Warren Buffett's secretary shouldn't pay a higher tax rate than Warren Buffett," Obama said. "There is no justification for it. It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million."
This all started when billionaire investor Warren Buffett opined in the New York Times, "My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government to get serious about shared sacrifice."
He went on to tell what has now become an infamous story about how he is paying less in taxes than his secretary. He claimed he paid less than $7 million in taxes last year - or under17.5% of his earnings, while his secretary paid 36%.
Well the Oracle of Omaha should break out his calculator again! If you do the math - he's actually paying much more than that.
As the New York Post points out - first Buffett had to make the money he invested - that gets taxed at about a 35% rate. Then when he made a profit on those investments - the capital-gains tax comes into play at 15%. That's 50%!
It's not just Buffett who has his math wrong. President Obama is way off base when he says the wealthy need to pay their fair share.
According to the Congressional Budget Office, the 10% of households with the highest incomes pay more than 70% of federal income taxes. The Tax Policy Center says this year households making more than a million dollars will pay an average rate of more than 29% of their income in federal taxes.
Households making between $50,000 and $75,000 will pay 15%. Lower-income households - those between $40,000 and $50,000 will pay 12.5%. And those making between $20,000 and $30,000 will pay under 6%.
So the claim that Buffett's employees are paying this shockingly high 36% rate on their income is ludicrous. The top marginal tax rate for wages in this country is 35%, and that is reserved for taxable income over $379,000 dollars!
So how come billionaires don't automatically pay that 35% if the rates are so high? Because the tax code is riddled with more than a trillion dollars in deductions, exemptions and credits - though they benefit people at every income level.
And there are nearly 1,500 households that filed tax returns with incomes above a million dollars that paid no federal income tax - but that's less than 1% of the nearly 237,000 millionaires in this country.
So Mr. President and Mr. Buffett, the big, bad wealthy people in America already pay a lot more in taxes than the rest of public. They already pay their fair share.
Let's put aside the fact: we have a spending problem, not a revenue one. Instead of raising taxes on these businessmen and women - all you have to do is reform the tax code.
Make it fair. Make it profitable. Make it work.
Gerri Willis is the host of "The Willis Report" (5PM/ET), a primetime program that covers the leading financial and political stories of the day and their impact on consumers. Click here to see more from Gerri Willis.