Is this fair?

April 13, 2012

Comments

This is either highly misleading or an outright lie depending on how you look at it. When the idea for the Buffet rule first emerged, media reports undertook to look at the numbers. 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%.

Individuals who earn most of their money from dividends pay a low rate on that income, partly because that money has already been taxed at the corporate tax rate of 35%. Add to that the 15% dividend tax and you have one of the highest income tax rates in the world.

Add to this that we're talking about a tax on capital which is the money that goes into growing businesses and creating jobs and you have a policy which is not going to be doing anything to help our economy.

As the President now says, this is not about making a serious attempt to reduce federal debt since the CBO scores the increased revenue at only 0.01% of the federal budget deficit. This is a populist appeal for some sort of social justice in tax policy which actually exacerbates our current economic problems.

What we should be focusing on is real tax reform which lowers tax rates overall and eliminates tax deductions which favor some individuals over others based on government whims. This is the recommendation of the President's blue ribbon deficit reduction committee, which was convened to great fanfare and then duly ignored.

April 13, 2012 at 10:32 AM