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Politics : Liberalism: Do You Agree We've Had Enough of It? -- Ignore unavailable to you. Want to Upgrade?

To: locogringo who wrote (126939)	3/22/2012 12:17:21 AM
From: Hope Praytochange	2 Recommendations Respond to of 224748

Revenues From Buffett Rule Don't Really Cut Deficit Tax Policy: The president wants a wrinkle in the tax code that will take more dollars from the wealthy. But it would be a useless tool of class warfare, producing less than $3 billion a year in additional revenues. Last fall, Obama proposed increasing the tax rate on millionaires. The plan is in part a response to the story, which has been debunked, that investor Warren Buffett's secretary Debbie Bosanek pays a higher tax rate than does Buffett himself. Still, Obama says a "Buffett Rule" is needed to ensure that no rich household would "pay a smaller share of its income in taxes than middle-class families pay." Sen. Sheldon Whitehouse, D-R.I., took up the cause when he introduced in February the Paying a Fair Share Act. This bill would force all Americans who make more than $1 million a year from all sources of income combined to pay at least 30% of that income to Washington. Of course, fairness isn't the real issue. It's about draining more money from taxpayers, about stocking the public fisc with greater sums of money for lawmakers to lavish on their constituencies. If fairness were the goal, Whitehouse would be cutting taxes on the rich down to middle-class rates. But that wouldn't divide Americans or stoke the angry furnace of class warfare. Fanning the politics of envy might make some lawmakers and various "fairness" hucksters feel good about themselves. It's a poor way to raise funds. 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. That relatively meager amount would do virtually nothing to bring down the debt, currently at $15.57 trillion, either. The Buffett Rule's poor performance as a revenue-raising instrument is no surprise. Part of the legislation's shortcoming is the fact that most wealthy Americans already pay more than middle-class Americans as a share of their income. According to the Tax Policy Center, the top 1% pay 30% of their income to Washington when all federal taxes are figured in, while the middle quintile pays just 12.6%. It also falls short because it would affect only a small slice of America. Citizens for Tax Justice, a tax change group on the left, reckons that only 0.08% of taxpayers would see their taxes rise under the Buffett Rule. This last point reinforces a salient but little-known fact: Even if Washington seized 100% of the top 1%'s yearly income, it would still not have enough money to retire the country's massively growing debt. Whitehouse's bill further fails in taxing wealth that is protected from Washington's grasping hand. Even the man himself who inspired Obama to come up with such a tax would not be subject to the levy. Why? Because Buffett has transferred his money into foundations and trusts the government can't touch. As shrewd as Buffett is, he's not the only rich man smart enough to shield his assets from the government. For our last piece of evidence that proves the Buffett Rule won't work, we look across the Atlantic, where Great Britain raised taxes in 2010. The goal there was to raise funds by installing a 50% income tax rate that her majesty's Revenue and Customs vowed would bring a "surge" in revenues that totaled hundreds of millions of pounds. Instead, tax collections fell as "well-off Britons" changed their behavior so they could "avoid the new higher rate," one government official explained. These examples are enough to convince rational thinkers that a Buffett Rule or any similar idea to hike taxes on the rich is a bad one that should be abandoned. But the political left doesn't operate on a rational level as much as it does on an emotional one. That's why Democrats talk so much about "fairness" and are driven to run other people's lives.