Tags: Warren Buffett

Shouldn’t ‘Millionaires’ Taxes’ Target Actual Millionaires?


Text  

This morning, Warren Buffett appears on the op-ed page of the New York Times, renewing his call for “Congress, right now, to enact a minimum tax on high incomes. I would suggest 30 percent of taxable income between $1 million and $10 million, and 35 percent on amounts above that.”

It is an echo of his 2011 op-ed, “Stop Coddling the Super-Rich,” that called for Congress to “raise rates immediately on taxable income in excess of $1 million” and “for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.”

It’s worth noting that Buffett’s millionaire’s tax has the notion of taxing actual millionaires; remember that Obama wants to increase taxes on “the wealthiest,” defining it households with an annual income above $250,000. In some parts of the country, a couple or two parents making roughly $125,000 each may be considered wealthy, but in other parts, with a high cost of living, that may only support a relatively modest lifestyle — far from the multimillionaires evoked by this tax discussion.

Note that many states have enacted their own “millionaires’ taxes” that kick in at much lower levels of income — an 11 percent tax on income over $175,000 in Hawaii, a 9.9 percent income tax on income over $125,000 in Oregon, a 9.3 percent income tax on income above $48,029 in California, an 8.98 percent income tax on income above $66,105 in Iowa, and quite a few others.

Elsewhere, Susan Estrich laments that she voted for Obama to preserve Obamacare and Roe v. Wade, but “I did not vote for Obama because I think I am paying too little in taxes.”

Candidates are package deals, of course.

Tags: Barack Obama , Taxes , Warren Buffett

The Buffett Rule Would Impact . . . 4,000 Taxpayers?


Text  

If the “Buffett Rule” would impact only 4,000 Americans, could we just contact those 4,000 taxpayers individually and ask them to voluntarily kick in some extra to pay down the debt? I’ll bet a bunch of them would do that. In fact, I’ll bet the president can ask them directly, in person, as almost certainly a bunch of them can be found at Obama’s $35,800-per-head fundraisers.*

This Bloomberg News report notes that about 4,000 Americans reported having income exceeding $1 million and paying a 15 percent tax rate.

Of the top 400 earners, 66 percent paid more than the 15 percent that is considered the average of a secretary.

* $35,800 is the maximum an individual can donate in one cycle ($2,500 to the candidate’s campaign for the primary, $2,500 to the candidate’s campaign for the general election, and $30,800 to the national committee total for the cycle), but Obama and his allies have found a way to permit candidates to give even more:

The White House did not release the names of the $45,000 ticket purchasers. It said the money would go to the Obama Victory Fund 2012, which is a joint project of the Obama campaign and the Democratic Democratic National Committee, as well as the Swing State Victory Fund.

The Swing State Victory Fund is a new operation set up by the campaign a few weeks ago that “will allow supporters who would like to contribute to individual state efforts to elect the president and Democrats up and down the ballot,” an Obama campaign official told The Hill in a statement last month.

Tags: Barack Obama , Warren Buffett

A 1% Spending Cut Is Six Times As Effective as the ‘Buffett Rule’


Text  

Obama’s solution to health care costs? Raising taxes on tanning salons and medical device manufacturers.

Obama’s solution to high gas prices? Raising taxes on oil companies.

Obama’s solution to a struggling economy? Raising taxes on investors through the “Buffett Rule.”

Notice a pattern here?

Of course, even if the “Buffett Rule” were enacted, the amount of revenue to the government is miniscule compared to both the annual deficit and our accumulated debt.

Savings from instituting the “Buffett Rule” in one year, according to the Joint Committee on Taxation: $5.1 billion.

By 2022, the committee estimates the Buffett Rule could be generating an additional $7 billion in revenue.

Savings from cutting federal spending from its fiscal 2011 level by one percent: $33.6 billion.

In other words, asking every federal agency and department to get by with 99 percent of what it received last year would generate six times the savings of the Buffett Rule.

Tags: Barack Obama , Warren Buffett

Obama’s Tax Policy, Inspired By One Anecdote


Text  

Apparently the Obama campaign believes the president can improve his reelection fortunes by touting the “Buffett Rule.” Today, squeezed between two high-dollar campaign fundraisers,  the president will travel to Florida Atlantic University in Boca Raton for an official (read, taxpayers cover a portion of the president’s travel costs) event on the economy, where he will make the case for the Buffett Rule. Again.

Of course, University of Michigan economics professor Mark Perry looked at IRS data and found out that the anecdote of Buffett paying a lower tax rate than his secretary is strikingly unrepresentative. Because so much of Buffett’s income comes from investments, most of the money he makes is taxed at the rate for capital gains, which varies for investments owned less for a year but is only 15 percent for those owned for more than a year. Thus, Buffett is paying a rate of only 15 percent on large chunks of the money he makes each year.

The income tax rate varies based upon income level, from 10 percent for those with the lowest incomes to 35 percent for those in the highest brackets. For many of the richest Americans, they make their money through actual income, not investments, and they pay a much higher rate than Buffett does.

Perry looked at IRS data and found “a secretary earning $50,000 would be paying an average federal tax rate of about 11 percent, compared to the 26.3 percent tax rate on the “super-rich” earning $10 million or more. Any CEO earning income above $200,000 would be paying federal income taxes at a rate of at least 24.6 percent, or more than twice the rate of a secretary earning $50,000.”

The Tax Policy Center has some updated numbers with 2011 data.

When you add up all federal taxes, those making between $40,000 and $50,000 per year pay an average of 12.6 percent.

Those making between $100,000 and $200,000 per year pay an average of 20.1 percent.

Those making between $500,000 and $1 million of 28.4 percent.

Those making $1 million or more per year pay an average of 31.4 percent.

FactCheck.org notes, “The administration’s figures also show that less than 1 in 10 of these high-income taxpayers paid less than a 15 percent income-tax rate.”

But hey, what else does the president have to talk about in a state like Florida? His sterling record of job creation? The fantastic housing market? Gas prices, and how they’ll help Florida’s tourism industry? Can he tell Florida’s Jewish community about how well he gets along with Bibi Netanyahu and how secure Israel feels in the face of the threat from Iran? His oh-so-popular health care law that may or may not be constitutional? How well our decision to provide food aid to North Korea is working out now that they’re test-firing another missile in a so-called “satellite launch”?

Nope. He can’t talk about any of those. So he has to suggest to Americans that their lives would be better if those greedy rich people – er, not the ones attending those high-dollar fundraisers, obviously – just paid more in taxes.

Tags: Barack Obama , Warren Buffett

Who Else Might Abandon Obama by 2012?


Text  

At some point, some aspiring Republican president — perhaps Rick Perry or Mitt Romney — has to make pitches to as many of Obama’s disappointed high-profile supporters as possible. A big rollout of disappointed Obama supporters switching sides could start a cascade effect, and knowing the thin-skinned, defensive, always-demonize-the-opponent instincts of the Obama team, might get them trashing their former supporters. Start with Mort Zuckerman, publisher of U.S. News and World Report:

Mr. Obama seems unable to get a firm grip on the toughest issue facing his presidency and the country—the economy. He now asserts he is going to “pivot” to jobs. Now we pivot to jobs? When there are already 25 million Americans who are either unemployed or cannot find full-time work? Does this president not appreciate what is going on?

It is no surprise that many have begun to doubt the president’s leadership qualities. J. P. Morgan calls it the “competency crisis.” The president is not seen fighting for his own concrete goals, nor finding the right allies, especially leaders of business big or small. Instead, his latent hostility to the business community has provoked a mutual response of disrespect. This is lamentable given the unique role that small business especially plays in creating jobs . . .

The president appears to consider himself immune from error and asserts the fault always lies elsewhere—be it in the opposition in Congress or the Japanese tsunami or in the failure of his audience to fully understand the wisdom and benefits of his proposals. But in politics, the failure of communication is invariably the fault of the communicator.

Many voters who supported him are no longer elated by the historic novelty of his candidacy and presidency. They hoped for a president who would be effective. Remember “Yes We Can”? Now many of his sharpest critics are his former supporters. Witness Bill Broyles, a one-time admirer who recently wrote in Newsweek that “Americans aren’t inspired by well-meaning weakness.” The president who first inspired with great speeches on red and blue America now seems to lack the ability to communicate any sense of resolve for a program, or any realization of the urgency of what might befall us. The teleprompter he almost always uses symbolizes and compounds his emotional distance from his audience.

We lack a coherent and muscular economic strategy, as Mr. Obama and his staff seem almost completely focused on his re-election. He should be spending most of his time on the nitty-gritty of the job instead of on fund raisers, bus tours and visits to diners, which essentially are in service of his political interests. Increasingly his solutions seem to boil down to Vote for Me.

Clearly the president will have to raise his game to win a second term, especially if the Republicans find a real candidate. Will voters be willing to give him another four years? Like many Americans who supported him, I long for a triple-A president to run a triple-A country.

Other possible defectors from the Obama bandwagon: Colin Powell, some of the more conservative members of the House (including retiring ones like Dan Boren of Oklahoma (who voted for Obama but declined to endorse) and Mike Ross of Arkansas), some of Obama’s disillusioned bundlers . . . Warren Buffett seems like a lost cause.

Tags: Barack Obama , Mort Zuckerman , Warren Buffett


(Simply insert your e-mail and hit “Sign Up.”)

Subscribe to National Review