Economics

These two charts show just how phony Obama’s ‘Buffett Rule’ really is

President Obama’s Buffett Rule is an almost perfect example of a) a solution in search of a problem, and b) politics masquerading as policy. A great pair of graphics from the Council on Foreign Relations illustrates both these points by showing just how progressive the U.S. tax code really is, and how Buffett is allowing himself to be used a prop:

The second chart shows that the income tax and the corporate tax, in particular, are highly progressive. As for how the Buffett tax would affect Warren Buffett himself, here’s the CFR:

In Buffett’s case, his taxable income is a mere 0.9% of his income held within Berkshire Hathaway, of which he owns 22%. His share of its 2010 pre-tax income was $4.2 billion dollars, taxes on which amounted to over $1.2 billion—a 29% rate. This income would be subject to tax again at the personal rate if it was taken out of the company, but since he has generously pledged to give away his fortune he would avoid the tax he wants to increase.

That’s right, Buffett and Obama failed to mention the double tax on his income and how he chose to leave most of his massive fortune to charity, the Bill & Melinda Gates Foundation, and avoid estate taxes. And the Buffett rule is somehow supposed to help create an economy that’s “built to last”? Not if this new economy is built on a foundation of demagoguery and deception.

3 thoughts on “These two charts show just how phony Obama’s ‘Buffett Rule’ really is

  1. Another point on progressivity of federal income tax code …

    The progressive nature of the tax code increased under George Bush! Top 5% of AGI earners paid a higher percentage of income taxes throughout the Bush years (even with the evil Bush tax cuts). At the same time the bottom 50% increasingly paid a lesser share.

    Hmm so those tax cuts that “favored” the rich actually increased the tax load on those people (in aggregate) and lessened the load on the bottom 50% of earners.

  2. That second chart is on the rates in the tax code, but not on the rate actually paid.

    Also, including excise and corporate taxes for the rich and not the poor is silly. Much of the taxes are passed on in prices that the poor pay for products.

    Do the chart again on income taxes paid on total income as opposed to adjusted income plus corporate stock ownership and it’s a very different story.

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