President Obama is urging Congress to pass the “Buffett Rule,” saying lawmakers who oppose it will have to “go on record” and explain to the American people where they are getting the money to keep funding tax breaks for the wealthy.
“We have to make choices. When it comes to paying down the deficit and investing in our future, should we ask middle-class Americans to pay even more at a time when their budgets are already stretched to the breaking point? Or should we ask some of the wealthiest Americans to pay their fair share?” Obama said in his weekly address.
The president’s proposal would require those making more than $1 million a year to pay at least the same tax rate as middle-class families. The rule is named after billionaire investor Warren Buffett, who has said publicly that he should not pay a lower tax rate than his secretary.
“Some people call this class warfare. But I think asking a billionaire to pay at least the same tax rate as his secretary is just common sense. We don’t envy success in this country. We aspire to it. But we also believe that anyone who does well for themselves should do their fair share in return, so that more people have the opportunity to get ahead – not just a few,” the president said.
Obama, who has positioned himself to run against the “do-nothing Congress,” said if lawmakers “vote to keep giving tax breaks to people like me – tax breaks our country can’t afford – then they’re going to have to explain to you where that money comes from.”
And how much would the Buffett Rule bring in to the Feds? Oh, maybe $3 billion:
[T]he “Buffet Rule” has little to do with sound fiscal policy and everything to do with election year politics:
[I]t’s rather apparent that the “Buffett Rule” has much more to do with 2012 election politics than it does with putting forward a responsible plan to fix our fiscal problems:
The White House, however, maintains that to focus purely on Buffett revenue is to miss the point. White House press secretary Jay Carney stressed to reporters on Wednesday that there are “millionaires and billionaires who pay taxes at a substantially lower rate” than poorer Americans. “The President simply believes that as a matter of principle, that unfairness ought to be changed.”
This may be smart politics. The polls would seem to indicate that it is. However, it’s not necessarily smart fiscal policy.
Indeed, it is not. Nor is it a serious attempt to address our long term problems.
For the small percentage of high-earners to whom this rule would apply, it might be a big deal, but they are a very small percentage of taxpayers. On the other hand, it’s been documented that a family of four earning $17,500 with full government benefits has more disposable income than a family of four earning $60k, who receive none. That means that if you lose your government benefits for getting a raise that takes your family above the line, you don’t begin to see any benefit from earning more until your family income reaches somewhere between $60k and $70k.
That seems to me an inequity that needs to be addressed. Let’s call it the Ace of Spades Rule, and push Congress to pass legislation that guarantees that nobody earning $50k per annum shall be penalized with respect to a family at $17.5k per annum when the value of government benefits is included in the calculation.
Perverse incentives. You want class warfare, Mr. President? We’ve got it for you, right here.
In other class warfare news, more educators are millionaires than workers in any other category, except for managers. Poor things.