If President Obama is really going to impose a "Buffett Tax" or "Buffett Rule" to raise taxes on those earning more than $1 million a year so that they pay the same percentage of their earnings in tax as middle-income Americans, then a simple increase in income taxes along the lines the president reportedly is going to propose won't really do the trick for Mr. Buffett. To really "stop coddling" Mr. Buffett would require at tax on foundations with more than $1 billion in assets and a tax on corporations with market capitalization of more than $100 million. I'm not advocating either of those, but to just raise Mr. Buffett's income taxes wouldn't mean much to him, because his taxable income is low compared to the assets he controls. (The New York Sun editorial Buffett's 'Income' has some useful background.)
Separately but relatedly, the New York Times article about the Buffett Tax explains:
investors like Mr. Buffett pay no more than 15 percent on most of their income because that rate applies to capital gains, dividends and "carried interest," which is the compensation paid to hedge fund partners and investment managers like Mr. Buffett.
Another reason many wealthy Americans pay a smaller share of their income in federal taxes is that the Social Security payroll tax does not apply to income above $106,800; most people do not reach the cutoff and pay the tax on all their income.
Counting income and payroll taxes, Mr. Buffett has said he paid an effective tax rate of 17.4 percent for 2010 compared with an average 36 percent rate for many employees of his company, Berkshire Hathaway.
I'm pretty sure this part of the Times article is just plain inaccurate; Mr. Buffett does not get paid "carried interest," and in fact he has campaigned to raise the taxes on it, in part because the current structure gives a relative advantage to the private equity funds that compete with him for deals.
Another reason not mentioned in the Times article for wealthy Americans to have a lower income tax is the tax exemption for interest on Federal, state, and municipal bonds, which wealthy Americans own a lot of.