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The Buffett Rule: A total sham
Our friend Joe Biden is in Exeter today to promote what the White House is calling “the Buffett Rule.” Here is how President Obama presented it Tuesday:
“You might have heard this, but Warren Buffett is paying a lower tax rate than his secretary. That’s wrong.”
It almost certainly is wrong — factually. Billionaire Warren Buffett wrote last August that his effective tax rate last year was 17.4 percent, but the average rate for employees in his office was 36 percent. That is impossible to verify without the release of his employees’ tax returns. It is most likely, though, that Buffett cited the rate his employees hit before doing their taxes, not the rate they paid after figuring their adjusted gross income.
The latest data from the Tax Policy Center show that the rich pay a significantly higher percentage of their income in taxes than the poor and middle class do. The average effective federal tax rates are: Top 10 percent of Americans: 26.7 percent; Top 5 percent: 27.9; Top 1 percent: 29.5. The Congressional Budget Office figures are identical. The CBO also divides Americans into fifths to look at their effective federal tax rates. The rates are, from lowest-income quintile to highest: 4 percent, 10.6 percent, 14.3 percent, 17.4 percent and 25.1 percent. As a group, the richest Americans pay more than six times the federal tax rate that the lowest-income Americans pay.
The Associated Press, ABC News and Politifact.com all fact-checked Obama’s claims about “the rich” not paying their fair share of federal taxes. All three concluded that the rich pay not only a much higher tax rate than the poor or middle class, but a much higher portion of all federal taxes. Tax Policy Center data cited by Politifact.com show that in 2007, the latest year available, the richest 20 percent of Americans paid 68.9 percent of all federal taxes. The richest 1 percent paid 28.1 percent.
Bloomberg News reported this week that the Buffett Rule would affect only about 400 Americans. It would raise only about $5 billion a year (assuming that those whom it would hit would not dodge it by moving their money overseas). That would fund just 1.4 percent of the total new “stimulus” the President proposed for next year. It would not be noticed in the $977 billion deficit Obama projects for next year.
The Buffett Rule is not about math or fairness or shared sacrifice. It is simply a cynical ploy to buy the votes of the ignorant and gullible.
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