Stephanie
Diamond Member
- Jul 11, 2004
- 70,230
- 10,864
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SNIP:
He says taxation is about fairness, not growth or revenue.
Forget Warren Buffett, or whatever other political prop the White House wants to use for its tax agenda. This week the Administration officially endorsed what in essence is the Obama Rule: Taxes must be high simply to spread the wealth, never mind the impact on the economy or government revenue. It's all about "fairness," baby.
This was long apparent to those fated to closely watch the 2008 campaign, but some voters might have missed the point amid the gauzy rhetoric about hope and change. Now we know without any doubt. White House aides made it official Tuesday in their on-the-record briefing on the new federal minimum tax that travels under the political alias known as the "Buffett rule."
The policy goal is to impose an effective minimum tax of 30% on the income of anyone who makes more than $1 million a year. When President Obama first proposed this new minimum tax he declared that the rule "could raise enough money" so that we "stabilize our debt and deficits for the next decade."
Then he added: "This is not politics; this is math." Well, remedial math maybe.
The Obama Treasury's own numbers confirm that the tax would raise at most $5 billion a yearor less than 0.5% of the $1.2 trillion fiscal 2012 budget deficit and over the next decade a mere 0.1% of the $45.43 trillion the federal government will spend. When asked about those revenue projections, White House aide Jason Furman backpedaled from Mr. Obama's rationale by explaining that the tax was never intended "to bring the deficit down and the debt under control."
Okay. So what is the point?
.The goal, Mr. Furman explained, is to establish a "a basic issue of tax fairness." Millionaires should pay an effective tax rate no lower than a middle-class secretary or a plumber. But wait: 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 U.S. already has a Buffett rule. The Alternative Minimum Tax that first became law in 1969 was also supposed to make sure that millionaires pay their "fair share." The top AMT rate is now 28%. But the AMT has become a public nuisance, adding new complexity to the tax code and ensnaring more and more middle-class families because it isn't indexed for inflation. The surest prediction in politics is that any tax that starts by hitting the rich ends up hitting the middle class because that is where the real money is.
An even greater absurdity is the White House claim that this is a first step to tax reform because it will ensure that the "rich don't take advantage of tax breaks or structure their affairs to pay less taxes." Huh?
A basic principle of any tax reform worth the name is to broaden the tax base in order to lower rates for everyone, not to raise them. The point is to make the tax code more efficient by reducing the incentive for avoidancelegal or illegal.
read it all here with comments..
Review & Outlook: The Obama Rule - WSJ.com
He says taxation is about fairness, not growth or revenue.
Forget Warren Buffett, or whatever other political prop the White House wants to use for its tax agenda. This week the Administration officially endorsed what in essence is the Obama Rule: Taxes must be high simply to spread the wealth, never mind the impact on the economy or government revenue. It's all about "fairness," baby.
This was long apparent to those fated to closely watch the 2008 campaign, but some voters might have missed the point amid the gauzy rhetoric about hope and change. Now we know without any doubt. White House aides made it official Tuesday in their on-the-record briefing on the new federal minimum tax that travels under the political alias known as the "Buffett rule."
The policy goal is to impose an effective minimum tax of 30% on the income of anyone who makes more than $1 million a year. When President Obama first proposed this new minimum tax he declared that the rule "could raise enough money" so that we "stabilize our debt and deficits for the next decade."
Then he added: "This is not politics; this is math." Well, remedial math maybe.
The Obama Treasury's own numbers confirm that the tax would raise at most $5 billion a yearor less than 0.5% of the $1.2 trillion fiscal 2012 budget deficit and over the next decade a mere 0.1% of the $45.43 trillion the federal government will spend. When asked about those revenue projections, White House aide Jason Furman backpedaled from Mr. Obama's rationale by explaining that the tax was never intended "to bring the deficit down and the debt under control."
Okay. So what is the point?
.The goal, Mr. Furman explained, is to establish a "a basic issue of tax fairness." Millionaires should pay an effective tax rate no lower than a middle-class secretary or a plumber. But wait: 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 U.S. already has a Buffett rule. The Alternative Minimum Tax that first became law in 1969 was also supposed to make sure that millionaires pay their "fair share." The top AMT rate is now 28%. But the AMT has become a public nuisance, adding new complexity to the tax code and ensnaring more and more middle-class families because it isn't indexed for inflation. The surest prediction in politics is that any tax that starts by hitting the rich ends up hitting the middle class because that is where the real money is.
An even greater absurdity is the White House claim that this is a first step to tax reform because it will ensure that the "rich don't take advantage of tax breaks or structure their affairs to pay less taxes." Huh?
A basic principle of any tax reform worth the name is to broaden the tax base in order to lower rates for everyone, not to raise them. The point is to make the tax code more efficient by reducing the incentive for avoidancelegal or illegal.
read it all here with comments..
Review & Outlook: The Obama Rule - WSJ.com
