The core of his message is:
President Obama calls on Congress to pass the Buffett Rule, a principle that ensures that millionaires and billionaires do not pay less in taxes as a share of their income than middle class families pay — as a matter of fairness.
Since Obama is illiterate when it comes to anything related to the economy, it might help if he visited the IRS website where he will find this data:
The difference between statutory income tax rates and effective tax rates is what he is focused on. Two of the largest drivers of this difference is the tax on Capital gains and Dividends. Imagine if Obama stopped talking about raising taxes on the rich and talked about raising taxes on Capital gains and dividends.
Data from the Tax Foundation reflect these differences:
The Top 1% pay an average tax rate of 24.01%
The Bottom 50% pay an average tax rate of 1.85%
The 25%-50% (middle class?) pay an average tax rate of 5.58%
All Taxpayers pay an average tax rate of 11.06%
So, if Obama want’s the rich to pay a share of their income similar to what the middle class families pay, I’m sure the rich will be happy to oblige.
What bothers me is that Warren Buffett started this “Tax The Rich” movement with a NYT Editorial. Here is his analysis:
Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.
Obama has translated this “policy” into higher taxes on anyone making more that $250,000, and added that anyone who makes more than $1 million should pay a tax rate of 30%. That’s a long way from the calculation that Bufffett did, indicating that the super rich’s average aggregate income was a “staggering $227.4 million on average.”
I used to have a lot of respect for Warren Buffett, but no longer. Why has he not been critical of the twisting of his “Coddling the super rich” suggestion.
As a revenue driver, the Buffett Rule is a loser.
A bill designed to enact President Barack Obama’s plan for a “Buffett rule” tax on the wealthy would rake in just $47 billion over the next 11 years, according to an estimate by Congress’ official tax analysts obtained by The Associated Press.
That a drop in the bucket of Obama’s deficits, but Obama doesn’t care about how much revenue the Buffett Rule generates. This is what he had to say with Charles Gibson at ABC: