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.