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Sunday, January 29, 2012

Buffet Rule would raise $50 billion from .08%

By Pat Garofalo
THINKPROGRESS

When President Obama announced his latest vision for the so called “Buffett rule” — a 30 percent minimum tax on millionaires — during his State of the Union address this week, Republicans were quick to criticize it. For instance, Speaker of the House John Boehner (R-OH) derided the proposal as a “political gimmick.” “It’s a smokescreen,” added Rep. Steve Scalise (R-LA).

However, as a new analysis from Citizens for Tax Justice pointed out, the Buffett rule as laid out in the speech could raise up to $50 billion per year to pay down the deficit, while affecting just 0.08 percent of taxpayers:

"Citizens for Tax Justice has calculated that President Obama’s 'Buffett Rule' would, if in effect this year, raise $50 billion in a single year and affect only the richest 0.08 percent of taxpayers — that’s just eight percent of the richest one percent of taxpayers. [...]

"To calculate the $50 billion figure, we assumed that there would be a minimum tax that applies to adjusted gross income (AGI) minus charitable deductions. (We’ll call this modified AGI.)

"We assumed that a taxpayer with modified AGI greater than $1 million would face a minimum tax of 30 percent of modified AGI. The taxpayer would pay whichever is greater, their personal income tax under the existing rules or this minimum tax."

Obviously, $50 billion by itself won’t balance the budget, but it certainly doesn’t hurt. At the same time, the Buffett rule will aid in correcting some of the problems in the tax code — like one quarter of millionaires paying lower rates than millions of middle class families and some millionaires paying no income tax at all — that have helped drive income inequality up to a level not seen in the U.S. since the 1920s.

6 comments:

James Keyworth said...

We apologize to the person who posted an anonymous comment in opposition to this article. For some reason that only the computer gods understand, it first caused the article to go away. When the article was reposted, the comment wouldn't attach. If the commenter would like to send his/her comment again, we will try to post it again.
Blog Editor

James Keyworth said...

Now it appears the aforementioned comment has posted at the end of "Out to Pastor," along with another in support. You can scroll down to that column and read the comments. Ain't technology grand?
Gazette Blog Editor

Something seems to be missing said...

Let's crunch the numbers and see what this article conveniently forgets to mention.
Our debt is now at 15.2 trillion dollars. ($15,200,000,000,000) Decreasing the debt by 50 billion dollars each year ($50,000,000,000) would reduce it .032%. That would be like us regular folks trying to decrease a $1,000 debt by paying it off at a rate of 3.2 cents each year. That would take 312.5 years to pay off if we never again went into debt for the next 300+ years.
However, the US just last year spent 1.3 trillion dollars ($1,300,000,000,000) more than we took in and will likely do something similar again this year. If we add the "millionare/billionare" 50 billion dollars to only this years debt, assuming 1.3 trillion like last year, that would decrease this years expected debt by 3.8%. That would be like paying down a $1000 debt by 38 cents each year while still going into debt each year by $999.62.
So, for the eight of us that read this, what do you think, "political gimmick", "smokescreen" or thoughtful solution to this problem?
As for my opinion, the writer said it all..."by itself won't balane the budget." Duh!!!!

Saving you some red ink said...

Discovered it Nobel. Left out the i in millionaire and billioniare and the c in balance.
No excuse for balance.
But millionaire/billionaire, well at least I know those mean more than $250,000 like someone else that's been using these terms the last few months.

Noble said...

As a matter of fact, NO one thing will do. Getting our finances under control will take a broad approach, including raising revenue as well as cutting spending. Cutting spending alone, as the GOP and the Tea Party are rabid about, is a fool's game which won't touch the present debt.
It is claimed by some that raising revenue in difficult times will only make things worth. This is nonsense. The small amount required of every person can easily be absorbed, while the accumulative effect will be huge. Even that won't completely solve our problem, though. We must get our economic engine running again. So far, the GOP and Tea Party have vehemently opposed any effort to accomplish this.
Pay down the debt to a manageable level by increasing revenue. Keep the debt under control by cutting spending in a responsible manner. Work towards a balanced budget - one that occurs naturally and not artificially forced. This is the only recipe which has a real chance of being effective. Quick fixes are the work of charlatans, just as they are in life.

The recipe is in the hands of the chief said...

"Quick fixes are the work of charlatans, just as they are in life."
Right on. Good to see you're coming around to what Obama's 30% is all about.