Posted on 03/22/2012 4:45:08 PM PDT by MissesBush
There goes the Buffett rule. Remember that political gambit, in which billionaire Warren Buffett pretended he was going to pay a much higher tax bill and President Obama pretended that raising rates on millionaires would make a dent in his hemorrhaging budget deficits?
In one fell swoop Wednesday, Congress's tax scorekeeper punctured both phony claims. The analysis from the Joint Committee on Taxation also showed less wealthy taxpayers why the Buffett ruse would eventually end up exposing them to higher taxes.
With Mr. Buffett's help, Mr. Obama promoted the fairy tale that millionaires pay lower tax rates than their middle-class employees (despite government data showing the opposite). The President then proposed to require all those making more than $1 million in adjusted gross income to pay a minimum of 30% in federal income taxes.
Senator Sheldon Whitehouse (D., R.I.) quickly drafted legislation to turn this re-election posturing into law. Joint Tax dutifully studied the bill and has delivered the official score: This year, the Buffett rule would increase federal revenues by all of $1.1 billion.
That's less than one-tenth of one percent of the $1.2 trillion budget deficit Mr. Obama is scheduled to run this year. Through 2022 Joint Tax expects less than $47 billion in total new revenues from the Buffett rule while the government will be adding trillions of dollars to the national debt. Joint Tax even concedes, as it is rarely wont to do, that the rule will affect taxpayer behavior: By raising the effective tax rate on capital gains, the rule will encourage people to realize fewer capital gains.
Since Mr. Buffett has never been shy about touting his ability to avoid capital-gains taxes, the sage of Omaha was never going to take much of a tax hit himself.
(Excerpt) Read more at online.wsj.com ...
“By raising the effective tax rate on capital gains, the rule will encourage people to realize fewer capital gains”
This is perfectly true, yet somehow will never, ever be understood by libs.
Obama has been one big lie from the day he started Community Organising until today.
he slicked his way into the Senate and he slicked his wayinto the Presidency.
It isn’t however Obama who is to blame , it ois the idiots who elected him and may do so again if we do not get together and put him and Wide Load back into Chicago, the city of killings and crooked politicians he came from.
Eliminate the nontaxability of municipal bonds and you’ll raise a lot of money. But Obama will never sign that.
Just like his old man, Obama started shucking and jiving long before he arrived in Chicago. Come November we have an opportunity to usher him out of DC and up to NY...where he can be the Sec gen of the United nations.
Gee sus, don’t even think about it.
That’s all we need, that crud in the UN.
Your suggestion has a great deal of merit, as would curtailing the mortgage interest deduction at a level comparable to the 75th percentile of interest payments on homes purchased in the past 30 years, or eliminating all sorts of specialized tax shelters.
The trouble is, every tax-shelter has a constituency that will defend it in Congress, and often tax-shelters actually encourage socially useful behavior, like lending money to cities, buying homes, engaging in research and development. . .
Until we rewrite and massively simplify the tax code (which I fear might take a revolution or a civilizational collapse to accomplish) I’ve been proposing the following:
1. Abolish the AMT.
2. Place a dollar cap on the amount of income that can be effectively excluded from taxation by any combination of deductions, tax-credits, or favorable tax treatment (e.g. lower rates on capital gains). The sole exception would be charitable donations, which would still be fully deductible (i.e. allowed to exclude income from taxation) up to the current percentage limits. I’ve toyed with various amounts and think somewhere between $100K and $250K for an individual, double for a married couple filing jointly, and maybe half the regular limit for those who can be claimed as dependents (with the unused portion of the dependent allowance transferable to the parent or guardian).
The form would be easier to fill out that the AMT form: add up all tax-exempt income, all deductions (other than charitable donations), tax credits divided by one’s top marginal rate, and amounts taxed at lower rates multiplied by the
difference in rates and divided by one’s top marginal rate. Subtract the cut-off from this, and add the result back onto your taxable income before figuring the tax.
Every activity encouraged by favorable tax treatment would still be encouraged, but one could not shelter earnings from taxation so effectively. It would also encourage the well-off to put their effort into securing better return on investment, rather than seeing to avoid taxation, probably encouraging productive economic activity.
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