President Obama announced today that he wants to raise taxes on America’s millionaires. As I explain on the homepage, this is hardly a novel concept. Obama’s so-called “Buffett Rule,” named for billionaire investor and tax enthusiast Warren Buffett, would establish some sort of minimum tax standard stipulating that “no household making over $1 million annually should pay a smaller share of its income in taxes than middle-class families pay.” Beyond that, the administration offered few details as to how the “rule” would be enforced, or how much they plan to raise in new tax revenue. Of course, the president insists “this isn’t class warfare, this is simple math.” A look at some of that “math”:
Millionaires accounted for just 0.17 percent (236,883) of the more than 140 million tax returns filed in 2009, and reported income totaling $727 billion.
The federal government will spend about $3.6 trillion this year (a rate of $300 billion per month), running an annual deficit of about $1.3 trillion. So, even if the IRS decided to confiscate every cent earned by millionaires in a given year, it would amount to less than half of the new debt we are taking on each year, and would barely be enough to fund the government for two months.
According to Forbes, the 400 wealthiest individuals in the U.S. are worth a combined $1.37 trillion. Confiscating all their wealth (not just annual earnings) would buy us another 4.5 months.
The top 1 percent of income earners (just a quarter of which are millionaires) earn just 20 percent of the country’s personal income, yet pay 38 percent of federal income taxes. For the top 10 percent of earners, those figures rise to 46 percent and 70 percent, respectively.
Obama says he wants a “fairer, more progressive tax system.” But given that “the rich” already pay a disproportionate share of income taxes, one wonders if it will ever be “fair” and “progressive” enough to satisfy the Left.