The Buffett Rule (Tax)
THE BUFFET RULE WOULD PAY OFF LESS THAN 1% OF PRESIDENT OBAMA’S DEBT
Next week, Senate Democrats plan to vote on S. 2230, the “Paying a Fair Share Act of 2012”, sponsored by Sen. Whitehouse (D-R.I.), more popularly known as the Buffett Rule. On Tuesday afternoon, President Obama spoke in Boca Raton, Florida in support of the bill. Today, Vice President Biden spoke in support of the bill in Exeter, New Hampshire.
The Buffett Rule, in reality, is a tax hike that would punish small businesses, would not create jobs, would fail to solve the nation’s debt crisis, and would not address high gas prices that have doubled under President Obama.
In a stark contrast to the Senate Democrats’ never-ending quest for higher taxes on small businesses, House Republicans have a plan for American job creators and will approve a 20% tax deduction for small business owners who are struggling to create jobs in the Obama economy.
THE FACTS ABOUT THE BUFFET RULE
GOOD FOR POLITICS: The Buffet Rule is little more than divisive political gimmickry that the president is now relying on since his policies have failed so thoroughly. President Obama even admitted that the Buffett Rule is purely political when he stated, “There are others who are saying, well, this is just a gimmick. Just taxing millionaires and billionaires, just imposing the Buffett Rule won’t do enough to close the deficit. Well, I agree.”
BAD FOR THE ECONOMY: The Buffet Rule would raise taxes on small business owners during the worst unemployment crisis since the Great Depression. With unemployment above 8% for 38 consecutive months under this administration’s failed policies, President Obama is proposing a tax increase on investment and small businesses at the worst possible time.
BAD FOR TAXPAYERS: The Buffet Rule would not reduce the deficit and would do nothing to stop President Obama’s runaway debt: If used solely for deficit reduction, the revenue expected to be raised over 10 years by the “Buffet Rule” would decrease February 2012’s deficit by a mere 20%.
This is politics, not math: FACT V. FICTION
OBAMA CLAIM: Obama claimed that the Buffet Rule would “stabilize our debt and deficits for the next decade.” OBAMA: “Warren Buffet’s secretary shouldn’t pay a lower tax rate than Warren Buffet…that basic principle of fairness, if applied to our tax code, could raise enough money that not only could we raise enough money that not only do we pay for our jobs bill, we be 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, 2011)
THE FACT: The Buffet Rule would only raise $46.7 billion over the next ten years, reducing our deficit by less than 0.4 percent. The tax increase will do virtually nothing to reduce short or long-term deficits. (“Revenue Estimate for S.2059, Joint Committee on Taxation, 3/20/2012)
o Even Democrats Admit that this Tax Increase Will Hurt Business and not help Deficits. On Wednesday Democrat Senator Chris Coons (DE) said the bill, “isn’t going to balance the budget” and that the revenue generated by taxing small business owners won’t solve the nation’s deficit woes, additionally other Democrats have begun to acknowledge the Buffet Rule’s insignificant impact on the federal debt.
OBAMA CLAIM: Obama claimed that the Buffett Rule was good for the American economy, “investments that we’ve made in infrastructure, in education, in science, in technology, in transportation” have made us an ‘economic superpower’. OBAMA: “investments, by the way, that have always been essential to the private sector’s success, as well, not just -- they're not just important in terms of the people that directly benefit from these programs, but historically, those investments that we’ve made in infrastructure, in education, in science, in technology, in transportation, that's part of what has made us an economic superpower. (PRESIDENT BARACK OBAMA, Remarks By the President on the Buffett Rule, Washington, D.C., April 11, 2012)
THE FACT: The Buffett Rule would increase taxes on private investment that our economy needs now more than ever. The Buffet Rule would drastically increase taxes on investment and discourage private investment in order to provide more failed government spending. Does President Obama think that it’s fair to punish those taking risks and investing in the economy in order to pay for more failed stimulus veiled as Washington “investments?”
OBAMA CLAIM: Obama claimed that the wealthiest American’s don’t pay their fair share, “when compared to the middle class, they haven’t been asked to do their fair share.” (PRESIDENT BARACK OBAMA, Remarks By the President on the Buffett Rule, Washington, D.C., April 11, 2012)
THE FACT: The Wealthiest Americans already pay a far higher share of taxes. According to the Wall Street Journal, “IRS data show that middle-class workers on average pay just under 15% of their income in federal taxes, while the richest 0.1% pay almost twice as high a rate on average, or 26%.” The president is now attempting to say that is somehow unfair.
WHAT THEY’RE SAYING IN THE NEWS
ASSOCIATED PRESS: “Obama is outlining his support for the so-called "Buffett rule" in Boca Raton, Fla., arguing that wealthy investors should not pay taxes at a lower rate than middle-class wage earners… Republicans have noted that Obama's proposal would collect $47 billion through 2022, a small amount compared with the $7 trillion in federal budget deficits projected during that period.” (Associated Press, “Obama in Florida pressing for ‘Buffett rule’, 4/10/2012)
WALL STREET JOURNAL: “Congressional estimators say the Buffet Rule would generate about $47 billion over the next decade, or less than 1% of the $6.4 trillion in deficits projected during that time under Mr. Obama’s budget.” (Wall Street Journal, “Obama to Visit Swing State to Push His Millionaire Tax”, 4/10/2012)
LOS ANGELES TIMES: “The Joint Committee on Taxation, a congressional committee, puts the (revenue) figure at about $47 billion over a decade, a drop in the bucket when it comes to trimming the $1.3 trillion annual deficit.” (Los Angeles Times, “Obama to step up push for ‘Buffett Rule’ as Tax Day approaches”, 4/10/2012)
BLOOMBERG: “Calling for tax fairness before the April 17 tax-filing deadline, Senate Democrats plan a procedural vote April 16 on a Buffett rule proposal…The measure probably won’t have the votes needed to advance in the Senate, where Republicans -- who deride the emphasis on the Buffett rule as political theater.” (Bloomberg, “Top Earners Pay Higher Tax Rate Without Buffett Rule, 4/10/2012)
EDITORIALS ON THE buffet RULE
DANA MILBANK: “President Obama admits it: His proposed “Buffett Rule” tax on millionaires is a gimmick… But Obama’s claim that the Buffett Rule ‘is something that will get us moving in the right direction toward fairness’ would be more convincing if he took other steps in that direction, too. Three years into his presidency, Obama has not introduced a plan for comprehensive tax reform — arguably the most important vehicle for fixing the nation’s finances and boosting long-term economic growth.” (Washington Post 4/11/12)
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. 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.” (Wall Street Journal Editorial, The Bottom 0.1%, 3/21/2012)
LOS ANGELES TIMES: “The proposed Buffett rule is more a political statement than a deficit-reduction tool, given how little money it may raise.” (Los Angeles Times Editorial, The ‘Buffet rule,’ and more, 9/20/2011)
INVESTORS BUSINESS DAILY: “The Joint Committee on Taxation has issued a report that says the Fair Share Act would bring in just $31 billion over 11 years. That will do nothing to cut the $7 trillion to $8 trillion in deficits that Washington is projected to run over the same period based on Obama's budget.” (Investors Business Daily, “As A Tax Revenue Raiser, President Obama’s Buffett Rule Would Be A Failure”, 3/21/2012)
THE HOUSE REPUBLICAN PLAN FOR AMERICA’S JOB CREATORS
The House Republican Plan for America’s Job Creators is focused on removing government obstacles to long-term economic growth—the kind of reforms needed to end the uncertainty facing small businesses and help create new private-sector jobs.