In its fiscal year 2013 budget proposal, the Obama administration has proposed a series of tax law changes designed to raise more revenue from higher-income earners. These proposals follow the argument known as the “Buffett rule,” advanced by the president in his State of the Union address. Obama has deemed it “common sense” for the wealthiest Americans to pay tax rates at least comparable to those of their salaried employees—a reference to the observation by famed investor Warren Buffett that he pays taxes at a lower tax rate than his secretary. These rates will serve the administration’s purpose of raising tax rates on investment income in the name of its view of tax fairness or justice. If, however, the administration is concerned that capital investment in United States firms continues at a time when economic recovery remains fragile, these proposals will harm the economy.