Sometime today President Barack Obama will ask Congress to pass what he calls the “Buffett Rule,” a tax on millionaires that will make sure that those who earn $1 million or more a year will pay at least as much as a percent of their income as do those in the middle class.
About .3 of U.S. taxpayers fall into that category: or, no more than 450,000 out of the 144 million who file returns.
The president calls his idea the Buffett Rule because Omaha billionaire Warren Buffett has repeatedly condemned Congress for “coddling billionaires” by continuing to give them tax breaks on their high incomes.
The president probably doesn’t expect Congress to pass his rich man’s tax hike. Republicans have said over and over again that there will be no tax hikes so long as they control the House and can kill any tax hike in the Senate with the filibuster.
But Obama will pound away at the super rich, regardless, convinced that the American people will agree that it makes no sense to tax capital gains, dividends and the income of hedge funds at 15 percent when the top rate for other earned income is 35 percent and the government desperately needs more income.
It would be difficult to come up with a more appealing campaign plank: Elect me, I want to do the right thing — tax the very rich and give the poor and middle class a break.
Not only is the Buffett Rule morally appealing, it also is easy to support at the practical level. While Republicans argue that taxing the rich would slow the recovery by reducing the amount invested in the economy, the fact is that taxes were higher during the 1990s when the economy was booming. The higher tax structure in place in that prosperous decade also made a balanced budget possible for the first time in decades.
The Bush tax cuts that followed did not result in more jobs and quite obviously did not prevent the worst recession since the Great Depression.
To cite these historical facts is not to argue that tax rates cause booms or busts. Economic cycles are far more complex than that.
It should be just as apparent that deficits disappear when tax revenues match or exceed government spending. One of the ways to reduce the deficit is to increase tax revenue.
This is the case Obama will put before the voters next year. Yes, he will say, spending must be reduced — but revenue also must be enhanced and the fairest way to increase revenue is to raise taxes on the very rich, at least enough to put millionaires on par with the middle class.
IT IS ASTOUNDING that Republicans appear ready to give him that argument without a struggle — and then brag about it.
Let’s do the math again. There are 450,000 voters who earn $1 million or more each year and would be hit by the Buffett Rule. Which leaves 143,650,000 voters who earn less than $1 million and would not see a tax hike.
So the ever-so-generous Grand Old Party is willing to offend 143,650,000 Americans to defend the tax advantages given to the 450,000 millionaires, multi-millionaires and billionaires like Mr. Buffett.
What awesome testimony to the power of the party’s anti-tax ideology that is.
— Emerson Lynn, jr.
