Commentary Magazine

Topic: Buffett Rule

Back Taxes and Buffett Rules

07.16.2012 - 12:40 PM

Remember the Buffett Rule, which was supposed to usher in an age of tax fairness and solve our debt crisis? (And by that, I mean cover .23 percent of our annual deficit while providing enough loopholes for top earners to dodge the rule altogether?)

Well, in the spirit of equality, here’s a new proposal aimed at federal employees. It’s called the Pay Your Taxes Plan. It’s fairly self-explanatory, and involves federal employees simply paying the $3.4 billion they owe in back taxes (including the $833,970 owed by White House staffers, $9.3 million owed by Treasury employees, and $17 million owed by the Justice Department). And the best part is that it would even raise more than the Buffett Plan’s annual revenue.

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Obama Drops His Name Into the Other Presidential Biographies

05.15.2012 - 9:08 AM

Many of President Obama’s fervent devotees are young enough not to have much memory of the political world before the arrival of The One. Coincidentally, Obama himself feels the same way—and the White House’s official website reflects that.

The Heritage Foundation’s Rory Cooper tweeted that Obama had casually dropped his own name into Ronald Reagan’s official biography on www.whitehouse.gov, claiming credit for taking up the mantle of Reagan’s tax reform advocacy with his “Buffett Rule” gimmick. My first thought was, he must be joking. But he wasn’t—it turns out Obama has added bullet points bragging about his own accomplishments to the biographical sketches of every single U.S. president since Calvin Coolidge (except, for some reason, Gerald Ford). Here are a few examples:

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The Buffett Rule and Tax Fairness

04.16.2012 - 9:40 AM

The so-called Buffett Rule will come up for a vote in the Senate today and will almost certainly fail. And that’s a good thing because the Buffett Rule is not tax policy, it is demagogy.

President Obama is exploiting the fact that the corporate and personal income taxes have never been properly integrated into a single, coherent tax system, which is a failure of government. Instead, there has been an endless series of ad hoc, jerry-built fixes during the last century to either prevent the exploitation of the two tax systems by taxpayers (such as individuals incorporating themselves to pay lower corporate rates) or to obviate what would be double taxation and thus—pardon the expression—unfair. Often, the fixes caused new opportunities for exploitation or created new unfairness (not to mention new opportunities for demagogy). This generated new fixes, and so on and on ad infinitum. The result is a tax code that is a national disgrace.

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The President’s Intellectual Exhaustion

04.12.2012 - 4:21 PM

Everyone from President Obama to Jason Furman, the principal deputy director of the White House National Economic Council, to the Washington Post’s Dana Milbank to Politico’s Jim VandeHei, agree that the so-called Buffett Rule is a gimmick that has almost no bearing on the budget deficit. And for good reason. The Treasury Department confirms that the tax would raise at most $5 billion a year—or less than 0.5 percent of the $1.2 trillion fiscal 2012 budget deficit and, over the next decade, 0.1 percent of the $45.43 trillion the federal government will spend (for more, see here). By one estimate, the “Buffett Rule” would cover 17 days of the president’s next decade of deficits. So it’s not, in any sense, a serious or meaningful proposal. And yet it has, as the New York Times reports, become a “centerpiece” of the Obama re-election campaign.

So there you have it. The Obama presidency has reached the point where a policy that virtually everyone (including the president) concedes is a gimmick is now a centerpiece of Obama’s campaign.

There are many ways to measure the intellectual exhaustion of the Obama presidency. This isn’t a bad place to start.

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Income Inequality and the Buffett Rule

04.12.2012 - 1:30 PM

In his post this morning on Liberals, Conservatives, and Tax Fairness, Peter Wehner writes,

Liberals are correct about this: income inequality has increased over recent decades. The task of conservatives is to give a full and fair picture of income gaps in America, to explain what is behind it, and to point out the injustice of the left’s remedies and the degree to which their proposals represent a radical departure from America’s ideals.

I could hardly agree more, and agree that his excellent article in National Affairs, “How to Think About Inequality,” is a great place to start.

I would add one more reason why income inequality has grown in recent decades, and it’s not a small one: technology. Whenever a major new technology develops, it causes a marked and sudden inflorescence of new fortunes that greatly exceed the old fortunes. This happened with railroads (Vanderbilt, Gould, Harriman, Hill, etc.), steel (Carnegie, Phipps, Frick, Schwab, etc.), automobiles (Ford, Dodge, Sloan, Kettering, Mott, etc.), petroleum (Rockefeller, Flagler, Archbold, etc.) For each of those megafortunes, there were hundreds of others whose possessors were merely very rich, not Forbes-400 rich.

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Liberals, Conservatives and Tax Fairness

04.12.2012 - 10:38 AM

In defending President Obama’s effort to make as the centerpiece of his campaign the so-called Buffett Rule — which would require anyone earning at least $1 million a year to pay at least 30 percent of his income in taxes — Jason Furman, deputy director of Obama’s National Economic Council, said, “Our goal is to have a progressive tax system.”

Furman added that the tax was never intended “to bring the deficit down and the debt under control” (contradicting a past claim made by the president). The goal, according to Furman, is to establish “a basic issue of tax fairness.”

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