"Buffett Rule" Would Raise Less than $5 billion in Taxes a Year
March 30, 2012
The Obama administration has placed a great deal of emphasis on the implementation of the "Buffett Rule" as a means to ensure that everyone pays their "fair share" and a tool of deficit reduction. However, economic analysis of the rule as written suggests it would do little to accomplish either goal, says Yahoo! News.
- The "Paying a Fair Share Act," a bill introduced by Senate Democrats last month, would require those who make more than $1 million a year to pay at least 30 percent of their income in taxes, with certain exceptions and stipulations.
- The Joint Committee on Taxation, which provides the official Congressional analysis of tax legislation, estimates the act would generate $47 billion over the next decade, or an average of just $4.7 billion per year.
- To put that in perspective, President Obama's budget forecasts a $901 billion deficit in 2013.
An important note in the analysis was that it assumed that the income tax cuts currently in effect expire as scheduled next year, putting the maximum personal income tax rate at 39.6 percent and the capital gains tax at 20 percent. That's up from current rates of 35 percent and 15 percent, respectively.
Source: James O'Toole, "'Buffett Rule' would raise less than $5 billion in taxes a year," Yahoo! News, March 20, 2012.
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