Any thinking person should
recognize President Obama’s current attempt to implement the so-called “Buffett
Rule” by imposing a higher tax rate on millionaires as the sham it is. Here are
the reasons.
1. Budget experts report that at
the most it will raise only $47 billion in taxes over the next ten years.
That’s an average of less than $5 billion per year. This year’s budget deficit
alone is projected to be over $3 trillion!
2. The President knows that this
tax has no chance of passing through Congress this year. It is a bald faced
attempt to gain headlines and win votes in an election year. It is not a
meaningful attempt to cut the budget deficit.
3. Why didn’t he propose it three
years ago when he had a majority in both houses of Congress? Instead, he and
his party voted to extend the notorious “Bush” tax cuts. The President has just
released his own tax return for 2011. Isn’t it funny that now that his book
royalties are drying up, and his own income has dropped below a million, that
he now proposes a tax on millionaires? In 2009, his income was over $5 million
dollars, and in 2010 it dropped to $1.7 million. His recently released 2011
return shows an adjusted gross income of only $789674. This still keeps him in
the 1% group but no one is occupying the White House in protest.
By the way, his income shows no
capital gains and very little dividend income. Is this why he is so willing to
increase taxes on those items?
4. A proposal to increase taxes on
capital gains overlooks a very important factor. Capital gains can only be taxed when they are realized. In
other words, a taxpayer must actually sell something for a gain before it can
be taxed. Someone like Warren Buffett will only pay tax on his Berkshire
Hathaway gains if and when he decides to sell some stock. History shows that
when taxes are raised investors usually put off taking gains.
Instead of a millionaire’s tax I
would like to propose a tax that would have broad appeal. I call it the
“Liberal” solution but it should appeal to Conservatives as well. Taxpayers are
already allowed to voluntarily pay more taxes than they have to. On line 60 of
his tax return President Obama could have elected to pay an additional or
voluntary tax. He opted not to do so, and paid according to the prevailing Bush
rates.
I propose that anyone who has
condemned the Bush tax cuts just ask their accountant to calculate what they
would have owed under the old system that prevailed during the Clinton years.
This proposal should especially appeal to rich liberals in blue states like New
York and California who are always in favor of higher taxes.
While they are at it, these
liberals could ask their accountants to go back and re-calculate their
tax liability for the past 10 years and pay up the difference. For example,
President Obama could lead the way by re-calculating the tax on his 2009 income
of over $5 million.
The “Liberal” solution does not
have to stop with income taxes. Wealthy liberals could opt to pay their estate
taxes under the old rules as well. Moreover, instead of setting up tax-exempt
foundations that will never die and never pay estate taxes, liberal aristocrats
like the Clintons, the Gores, the Kerrys, the Kennedys, and the Buffetts could
leave their estates to the government. Don’t they think the government will use
their money as wisely as their foundations? ###
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