The Buffett Tax Is A Distraction, Not A Solution To Paying For Obama's Binge Spending
"Obama Will Make The Proposed Buffett Rule A Central Part Of A Speech Tuesday At Florida Atlantic University In Boca Raton, Said A White House Announcement." (David Jackson, "Obama, Democrats To Promote 'Buffett Rule'," USA Today, 4/7/12)
CONTRARY TO OBAMA'S RHETORIC, THE BUFFETT TAX WOULD RAISE AN INSIGNIFICANT AMOUNT RELATIVE TO HIS BINGE SPENDING
OBAMA'S CLAIM:
OBAMA'S CLAIM:
President Obama Claimed That The Buffett Rule Would "Stabilize Our Debt And Deficits For The Next Decade." OBAMA:"What I've said is this is a very simple principle that everybody should understand: Warren Buffett's secretary shouldn't pay a lower [sic] tax rate than Warren Buffett. A teacher making $50,000 a year, or a firefighter making $50,000 a year or $60,000, shouldn't be paying a higher tax rate than somebody making $50 million a year. And that basic principle of fairness, if applied to our tax code, could raise enough money that not only do we pay for our jobs bill, but we also stabilize our debt and deficits for the next decade. And as I said when I made the announcement, this is not politics; this is math." (President Barack Obama, Remarks By The President At DNC Event, San Diego, CA, 9/26/11)
THE FACTS: The Buffett Tax Would Only Raise $46.7 Billion Over The Next Ten Years. ("Revenue Estimate For S.2059," Joint Committee On Taxation, 3/20/12)
"That Figure Would Be A Drop In The Bucket Of The More Than $7 Trillion In Federal Budget Deficits Projected During That Period." "That figure would be a drop in the bucket of the more than $7 trillion in federal budget deficits projected during that period. It is minuscule compared with the many hundreds of billions of dollars it would cost to repeal the alternative minimum tax, which Obama's budget last month said he would replace with the Buffett-rule tax." ("Report: 'Buffett Rule' Tax On Rich Would Do Little Against Deficits," The Associated Press, 3/21/10)
The Wall Street Journal : "This Year, The Buffett Rule Would Increase Federal Revenues By All Of $1.1 Billion. That's Less Than One-Tenth Of One Percent Of The $1.2 Trillion Budget Deficit Mr. Obama Is Scheduled To Run This Year." "Senator Sheldon Whitehouse (D., R.I.) quickly drafted legislation to turn this re-election posturing into law. Joint Tax dutifully studied the bill and has delivered the official score: This year, the Buffett rule would increase federal revenues by all of $1.1 billion. That's less than one-tenth of one percent of the $1.2 trillion budget deficit Mr. Obama is scheduled to run this year. Through 2022 Joint Tax expects less than $47 billion in total new revenues from the Buffett rule while the government will be adding trillions of dollars to the national debt. Joint Tax even concedes, as it is rarely wont to do, that the rule will affect taxpayer behavior: By raising the effective tax rate on capital gains, the rule will encourage people to realize fewer capital gains." (Editorial, "The Bottom 0.1%," The Wall Street Journal, 3/21/12)
By Contrast, According To A CBO Report, Obama's Policies Will Result In $6.4 Trillion In Deficits In The Next Ten Years. "The Congressional Budget Office said Friday that President Barack Obama's tax and spending policies will yield $6.4 trillion in deficits over the next decade, more than double the shortfall in CBO's own fiscal baseline - even after taking credit for reduced war costs." (David Rogers, "CBO: Exploding Debt Under Obama," Politico, 3/16/12)
The Buffett Tax Would Pay For Only 0.5 Percent Of Obama's $9.59 Trillion Debt Over The Next Decade. (Office Of Management And Budget, "Budget Of The United States Government, Fiscal Year 2013," The White House, 2/13/12; "Revenue Estimate For S.2059," Joint Committee On Taxation, 3/20/12)
The Buffett Tax Would Pay For Only 0.1 Percent Of The $45.43 Trillion That Obama Plans To Spend Over The Next Decade. ("An Analysis Of The President's 2013 Budget," Congressional Budget Office, 3/16/12)
Over The Next Decade, The Buffett Tax Would Only Raise Enough Money To Pay 20 Percent Of The Record $229 Billion Deficit Obama Amassed In February 2012. ("Monthly Budget Review: February 2012," Congressional Budget Office, 3/7/12; "Revenue Estimate For S.2059," Joint Committee On Taxation, 3/20/12)
In 2014, The Buffett Tax Would Actually Raise $6.1 Billion Less Than The Present Tax Code. ("Revenue Estimate For S.2059," Joint Committee On Taxation, 3/20/12)
OBAMA'S CLAIM: Obama's Budget Contends That The Buffett Rule Could Replace The Alternative Minimum Tax. "And he is proposing that the Buffett rule should replace the Alternative Minimum Tax, which now burdens middle-class Americans rather than stopping the richest Americans from paying too little as was originally intended." (Office Of Management And Budget, "Cutting Waste, Reducing The Deficit, And Asking All To Pay Their Fair Share," The White House, 2/13/12)
THE FACTS: Analysis By The Tax Policy Center Shows That The Buffett Tax Would Fall Nearly $1.1 Trillion Short Of Replacing The Revenue From The Alternative Minimum Tax. ("T12-0074 - Replace AMT With Fair Share Tax: Impact On Individual Income Tax Revenue (Billions Of Current Dollars), 2012-22," Tax Policy Center, 3/15/12)
" So Until Someone Figures Out How To Clone Rich Taxpayers, It's Unlikely The Revenue Generated By The Buffett Rule Could Match [The AMT]." "In his budget, Obama does call for the Buffett Rule to replace the Alternative Minimum Tax entirely. That would be simpler than adding it on top of the AMT. But it almost certainly would create a new revenue problem. That's because the AMT is projected to raise a ton of revenue -- roughly $2 trillion over 10 years, give or take a few billion. So until someone figures out how to clone rich taxpayers, it's unlikely the revenue generated by the Buffett Rule could match it." (Jeanne Sahadi, "Buffett Rule: Not Ready For Prime Time," CNN Money, 2/15/12)
THE BUFFETT TAX AS ACTUAL POLICY "LEAVES MUCH TO BE DESIRED"
"The Buffett Rule Makes For Great Stump Speeches In An Election Year. But As Tax Policy It Leaves Much To Be Desired." (Jeanne Sahadi, "Buffett Rule: Not Ready For Prime Time," CNN Money, 2/15/12)
"Even Without A Buffett Rule In Place In 2015, Nearly All Millionaires Would Already Be Paying More In Taxes As A Percentage Of Their Income Than Those In The Middle Class …" "But here's the thing: Even without a Buffett Rule in place in 2015, nearly all millionaires would already be paying more in taxes as a percentage of their income than those in the middle class, Roberton Williams, a senior fellow at the Tax Policy Center, noted in a TaxVox blog post. He estimates that middle-income households on average would pay 15% of their income in taxes, using the bill's parameters, while 99% of millionaires would pay more than that. And that vast majority of that 99% would pay an effective tax rate of 20% or higher."(Jeanne Sahadi, "Buffett Rule: Not Ready For Prime Time," CNN Money, 2/15/12)
"Tax Experts Say Creating A New Alternative Minimum Tax For The Wealthy Might Make For Good Political Argument, But It Is Less Compelling As Policy." (Annie Lowrey, "The Buffett Tax Rule Is Really More Of A Guideline," The New York Times, 2/16/12)
Leonard Burman, Tax Expert And Syracuse University Professor: The Buffett Tax "Doesn't Make Any Sense" And "Undermines The Tax Code." "'It just doesn't make any sense to have one set of rules that applies to some people and one set of rules that applies to everyone else,' said Leonard E. Burman, a tax expert and professor at Syracuse University. 'It's really complicated,' Professor Burman said. 'I'm very sympathetic to taxing capital gains like ordinary income; that's the issue this proposal is ostensibly addressing. But the idea that we have different sets of rules for different people? It undermines the tax code.'" (Annie Lowrey, "The Buffett Tax Rule Is Really More Of A Guideline," The New York Times, 2/16/12)
Member Of Obama's Fiscal Commission, Economist Alice Rivlin Said Of The "Buffet Rule" That "The Way To Fix The Tax Code Is To Fix The Tax Code, Not To Add Another Complication At The Margin." ALICE RIVLIN: "I'm very fond of Warren Buffett. I think his basic observation that he pays too little taxes is right. But the way to fix the tax code is to fix the tax code, not to add another complication at the margin." (CNN's " State Of The Union," 9/18/11)
Roberton Williams Of The Tax Policy Center Estimated That Taxing All Millionaires At 50 Percent, "A Tax Rate That's So High It Probably Would Never Happen", Would Only Solve 10 Percent Of The Deficit Problem. "But Williams points out that more heavily taxing CEOs, celebrities, sports stars and hedge fund managers isn't the answer to the nation's deficit woes - not even close. He put together an estimate based on a tax rate that's so high it probably would never happen - 50 percent - and says that if you taxed all income above $1 million at that rate, you'd only get 10 percent of what most experts say is needed to tackle the nation's deficit." (Tamara Keith, "Does Buffett Rule Add Up For Obama Deficit Plan?" NPR, 9/19/11)
Los Angeles Times : "The Proposed Buffett Rule Is More A Political Statement Than A Deficit-Reduction Tool, Given How Little Money It Would Raise." "The proposed Buffett rule is more a political statement than a deficit-reduction tool, given how little money it may raise. In that sense, it's like Obama's oft-repeated call to eliminate tax breaks for corporate jets." (Editorial, "The 'Buffett Rule,' And More," Los Angeles Times, 9/20/11)
OBAMA HAS TO RAISE TAXES TO PAY FOR HIS FAILED POLICIES AND WASTEFUL SPENDING
$347.1 Billion: Total Cost Of The Interest On The Money Borrowed To Pay For The Stimulus Over The Next Decade. (Douglas Elmendorf, Letter To Rep. Paul Ryan, Congressional Budget Office, 1/27/09)
$34.7 Billion: Loans Handed Out To Companies Like Solyndra Through The Department Of Energy 1705 Loan Program. ("The Financing Behind America's Clean Energy Environment," Department Of Energy, Accessed 4/9/12)
$24 Billion: Stimulus Contracts And Grants Awarded To Over 3,700 Recipients That Were Delinquent On Their Federal Taxes. ("Thousands Of Recovery Act Contract And Grant Recipients Owe Hundreds Of Millions In Federal Taxes," Government Accountability Office, 4/28/11)
$4.75 Billion: Stimulus Funds Awarded Through The Weatherization Assistance Program. ("Progress And Challenges In Spending Weatherization Funds," Government Accountability Office, 12/16/11)
$4.3 Billion: Stimulus Funds For California's High-Speed "Train To Nowhere." (Daisy Nguyen, "Critics Pan Proposed High-Speed Rail Segment," The Associated Press, 12/1/10)
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