• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Morning Bell: Buffett Rule 101

    President Obama traveled to Florida yesterday to distract the nation from its real problems by laying out his case for the Buffett Rule, a plan to drastically raise taxes on successful Americans and small businesses. The core of his argument is that the rich aren’t paying their fair share. It makes for great populist rhetoric, especially when families are hurting and angry under today’s high unemployment, but the result is terrible policy. Worse, it’s a distraction from the big issues facing the nation, like the deficit, the economy, jobs, gas prices, health care, and on and on, none of which are addressed by the President’s proposals, and none of which he wants to talk about.

    Will the President’s tax hike at least tackle the country’s fiscal problems? No, it won’t.

    According to a recent analysis by the congressional Joint Committee on Taxation, the Buffett Rule would raise a mere $47 billion over ten years. Meanwhile, President Obama’s budget calls for adding $6.7 trillion to the national debt. That means that the Buffett Rule will only cover one half of one percent of the President’s new spending. Soaking the rich cannot get deficits down, only spending reductions can do that.

    When it comes to the biggest problem America is facing — a weak economy and high unemployment — the Buffett Rule would weaken the economy and make matters worse. Heritage’s J.D. Foster and Curtis Dubay write that the tax would fall most heavily on job creators (who pay taxes at the individual rate) and confiscate their resources that would otherwise be used to start new businesses, grow existing businesses, and hire more workers. As a result, economic growth will slow down right along with job creation.

    The President says, “This is not about a few people doing well. We want people to do well, that’s great. But this is about giving everybody the chance to do well.” Really? Raising taxes on the rich, weakening the economy, somehow gives everybody the chance to do well? Raising taxes on anybody somehow gives everybody the chance to do well? This is absurd even by the low standards of American political rhetoric.

    Here’s what you really need to know about Obama’s plan.

    Under the Buffett Rule, businesses and families earning $1 million will pay a minimum 30 percent effective tax rate. The President says those Americans aren’t paying enough, and as proof he points to billionaire Warren Buffett’s secretary who reportedly pays a higher tax rate than her uber-wealthy boss. But right from the get go, the President is distorting the facts.

    So how can President Obama get away with saying that Warren Buffett pays lower tax rates than his secretary? Many wealthy Americans who have done well like Buffett receive dividends and capital gains — a form of investment income that is subject to multiple levels of tax. First, the investment income results from investment. This capital didn’t appear out of thin air. It was earned and taxed previously, often many times over at rates up to 35 percent.

    Then, once invested, it generates income that is taxed at the corporate level at a 35 percent rate, and then it’s taxed again at the individual level at a 15 percent rate on dividends and capital gains. The combined rate on corporate earnings alone is over 45 percent, and this is all after the first layer of tax.

    One way to think about this is to imagine you’re driving down a toll road, and you pay three separate tolls. The first toll of $3.50 is when you get on the highway. Then after a few miles you pay another $3.50 toll, and when you exit there’s a final toll of $1.50. A reporter asks you as you leave the last tollbooth how much toll you paid. What’s the most accurate answer — what you paid at the last tollbooth or what you paid altogether? Obviously, feeling some $8.50 lighter in the wallet, the correct answer is to respond with the total.

    Conveniently for him, President Obama only talks about the last level of tax, the 15 percent portion, leaving out the rest. He only wants to talk about the last toll paid, not the total, and that’s how he makes his disingenuous argument. And all of this leaves out the final tax that many wealthy Americans pay — the death tax, which is set to return to its 55 percent level in 2013.

    Then there’s the inconvenient fact that if you look at only the last level of tax, the data show clearly the highest-earning families and businesses in America are already shouldering the vast majority of the country’s tax burden. Heritage’s Curtis Dubay writes that the top 1 percent of income earners — those earning more than $380,000 in 2008 — paid more than 38 percent of all federal income taxes while earning 20 percent of all income. Meanwhile, those in the top 10 percent ($114,000 and above) earned 45 percent of income and paid 70 percent of all taxes. By comparison, the bottom 50 percent of income earners — those earning less than $33,000 — earned 13 percent of all income and paid less than 3 percent of federal income taxes.

    Like clockwork, the President has returned to his favorite policy solution: raising taxes. When gas prices went up, he called for higher taxes on oil companies. When he wanted to try to create jobs, he called for higher taxes to pay for stimulus spending. When health care needed a fix, he called for higher taxes to fund Obamacare. If President Obama truly wanted to be fair, he would pursue tax reform like The Heritage Foundation’s “New Flat Tax,” included in its Saving the American Dream plan. It’s simple, coherent, and comprehensive, encourages saving and investment, offers relief for seniors, and helps low and middle income families purchase health care and pay for higher education.

    Leading with effective policy solutions, though, isn’t the name of the President’s game. Rather, his goal is to concoct a distraction from his failed leadership. Under his watch, the U.S. Senate has failed to pass a budget for the last 1,078 days, the House unanimously rejected Obama’s latest budget, and meanwhile the national debt is closing in on $16 trillion. Medicare, Medicaid and Social Security are careening toward implosion, gas prices have doubled, the economy is underperforming, 12.7 million Americans remain out of work, and the President’s signature legislation — Obamacare — has never been more unpopular. Instead of offering solutions, the President is offering class warfare branded as the Buffett Rule.


    Quick Hits:

    Posted in Economics [slideshow_deploy]

    73 Responses to Morning Bell: Buffett Rule 101

    1. right on, right on, right on

      • Michael says:

        Under the theory in this article, nobody should have to pay any taxes — because at some point – somebody already paid some tax on their money. For example, I am a lawyer, and my client was already taxed on the money he pays me, just as surely as the corporation was already taxed on the money it pays its shareholder. "It is all dependent upon whose ox is being gored."

        • Donald Bryan says:

          Michael, you’re a lawyer and your reading comprehension and reasoning ability are that poor ?

          Let me try to help you: When you client paid you, it was with his AFTER tax income; then, that money became YOUR pre-tax income, and so you will pay taxes on it.

          Please, somebody hand be a JD !

    2. Mary......WI says:

      The problem is many Americans are not knowledgeable enough to understand the truth about the Buffett Rule. The less fortunate and less educated only now they want more money for "things" and they want it from those that have been successful in life through hard work and commitment. I'm willing to bet if you gave a small business that earned $250,000 to a "poor" person they would have a fit as to how much taxes they would have to pay on that money. So, once again Obama LIES to convince Americas less fortunate people the wealthy are evil people so he can continue his destruction of the United Sates of America.

      • Michael says:

        Those that have been successful in life through hard work and commitment" had quite a bit of help. Notwithstanding the American workers that help make their profits, and which they have abandoned — they also utilized OUR (all Americans') infrastructure — the sea ports through which they import their foreign made products, cranes, pipelines, tanks, etc. — the super highways — which would last forever but for the huge tractor trailer trucks full of their goods being shipped over them — public airports build and maintained and operated by public employees. And what about the Doctors that find a place to work in publicly built hospitals and lawyers that practice in public buildings?? We all pay. And that does not even take into account that they benefit from this great (?) capitalistic system. And I did not even mention the military that protects their plants both here and abroad and who pays the most for that — actually — the soldiers, sailors and airmen — and very few are blue bloods?

    3. Term Limits, Baby! says:

      Our freedom destroyer and food stamp president in the oval office has no new ideas or desire to improve our economy. He wants everyone dependent upon big government. This is all he can offer: Spend more money, increase the number of people dependent on government hand outs, and raise taxes and punish the wealth creators in order to pay for it. His incessant, negative, hateful, punish-the-rich message is not that of a president who believes in and promotes the American dream.

    4. Frank says:

      Unfortunately, except for Ron Paul's budget plan (which cuts $1 trillion on spending IMMEDIATELY and will balance the budget in 3 years), all the other Democratic & Republican budgets offered are a joke! Republicans are almost as much to blame for the economic mess we are in as the Democrats. Little will change even if Romney is elected (which looks like now he won't & for multiple good reasons… but I hate to see Obama re-elected). The Establishment in both major parties are corrupt & the MSM is controlled by the Power Elite pushing for a One World Order & One World Currency at the expense of the US Dollar & US Constitution.

      I'm not hopeful for this once great nation nor for the US Dollar which was once on a dual gold/silver standard that insured it had intrinsic value. The penalty once for anyone at the Treasury Dept. that made money not backed by the standard amount of gold or silver was: DEATH! Now the US government prints up money out of thin air whenever they want to, causing the hidden tax of inflation & robbing everyone who holds US Dollars by decreased buying power.

      Wake up America. The USA is headed for financial disaster! And you keep re-electing these jerks?

      • Beverly K Bennett says:

        Yes, you spoke the truth quite explicitly. The Republicans have blown any chance of beating Obama in this upcoming election. They didn't support the strongest candidate running, John Huntsman, Jr. He and Ron Paul on staff or as Vice President just might have saved our once GREAT Nation!

    5. Cecelia P. says:

      If Obama is re-elected in November, it will be election by the ignorant – those who can see what is happening will have stayed home. "Those who refuse to participate in politics shall be governed by their inferiors." – Alan West quoting Plato

    6. edree says:

      Totally political. This will do NOTHING to improve the debt. It will just incite class warfare.

    7. Dam Calabria says:

      Why are we so reluctant to call out Mr. Buffett for the world class hyprocrite that he is?
      Let's focus and what he does – not what he says.
      If we do that the fraud that he and Mr. Obama are will be plain for all to see.

    8. Mark says:

      Bar Stool Economics:

      Suppose that every day, ten men go out for beer and the bill for all Ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

      The first four men (the poorest) would pay nothing.
      The fifth would pay $1.
      The sixth would pay $3.
      The seventh would pay $7.
      The eighth would pay $12.
      The ninth would pay $18.
      The tenth man (the richest) would pay $59.

      So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. 'Since you are all such good customers, he said, 'I'm going to reduce the cost of your daily beer by $20. Drinks for the ten now cost just $80.

    9. mark says:

      Bar Stool Economics part2

      The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what
      about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized
      that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would
      each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he
      proceeded to work out the amounts each should pay.

      And so:

      The fifth man, like the first four, now paid nothing (100% savings).
      The sixth now paid $2 instead of $3 (33% savings).
      The seventh now paid $5 instead of $7 (28% savings).
      The eighth now paid $9 instead of $12 (25% savings).
      The ninth now paid $14 instead of $18 (22% savings).
      The tenth now paid $49 instead of $59 (16% savings).

    10. mark says:

      Bar Stool Economics part3

      Each of the six was better off than before And the first four continued to drink for free. But once outside the restaurant, the men began to compare
      their savings.

      'I only got a dollar out of the $20', declared the sixth man. He pointed to the tenth man,' but he got $10!'

      'Yeah, that's right', exclaimed the fifth man. 'I only saved a dollar, too. It's unfair that he got ten times more than me!'

      'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two? The wealthy get all the breaks!'

      'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor!'

      The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without
      him. But when it came time to pay the bill they discovered something important. They didn't have enough money between all of them for even half
      of the bill!

    11. mark says:

      Bar Stool Economics part4

      And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit
      from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas
      where the atmosphere is somewhat friendlier.

      David R. Kamerschen, Ph.D.
      Professor of Economics, University of Georgia
      For those who understand, no explanation is needed.
      For those who do not understand, no explanation is possible

      • Joe says:

        Let's tax every one a set amount or make everyone pay a set amount for the beer, 10 people all pay 5 dollars for the beer, the weekly paycheck is as follows, the first 4 men $5, the fifth $10, the sixth $15, the seventh $20, the eighth $25, the ninth $30, and the tenth $70,000,000,000,000; Now who pays more for the beer? If you said they all pay the same, your wrong because the first 4 paid all they had, in fact, nobody can really afford to drink in the bar except the 10th, The first 4 has a choice, go drink 1 beer or not have enough gas to go bust his back the next day to make the 10th man rich; so instead of 10 men drinking in the bar there is only one; The owner of the bar will then have to close because he is not selling enough beer; NOW, you have to go overseas if you want to have a beer~~~ (Sorry my period button doesn't work)

    12. Joe Meilinger says:

      The news media and Heritage itself keep referring to the families hurting because there are no jobs. Though this may be somewhat true it is not the real reason people are hurting. Has anyone seen the quiet inflation that is going on while all the economic gurus tell us there is none. Food prices are sky high, hardware, medicine, appliances, computers, and I could go on and on, are all higher; and it is not JUST gasoline, plastics and packaging. No inflation? What someone better go out and do some price checking and compare to last year or previous years. The country is in a spiral that I am not sure anyone can stop.

      • Mary A says:

        "families hurting because there are no jobs. Though this may be somewhat true" ??

        with over 8% reported unemployment by the Bureau of Labor Statistics, which many credible sources report is actually up to 25%, (or 1 out of every 4 in the labor force) , think your "somewhat true" reference, is a bit of an understatement. http://news.yahoo.com/actual-unemployment-rate-so

        Combined with the obvious inflation that is definitely under reported by a complicit MSM (LSM), or Obama's fan-club, it is a deadly ticking time-bomb that 1000 Buffet rules would not defuse.

        "Examples of Inflation in Last Two Years Since Obama Became President
        A little more than two years ago, Barack Obama was inaugurated as president of the United States . Are you better off today than you were two years ago? Numbers don't lie, and here are the data on the impact he has had on the lives of Americans: " http://www.worldviewweekend.com/worldview-times/a

        Anything short of a "Major Overhaul" of almost all Fed., State, and local Gov. entities, their administration, operations, taxes, entitlements and crony policies, is like applying a bandage to a hemorrhage, or the proverbial drop in a bucket.

        While Obama may be a "Disaster of Biblical proportions", Bush, many of his predesesors, and present /prior Congresses of all stripes have bi-partisanly contributed to the catastrophe, in every way imaginable.
        Bushes tax cuts that blatantly benefited primarily the wealthy, while creating no significant economic growth except for the wealthy, while engaging in 2 monumentally expensive unpaid wars, and also creating a much needed but unpaid for expansion of Medicare "D" prescription coverage is as fiscally insane as any of Obama's hair brain programs and policies.

        And the constant conservative "war cry" of the "50% of taxpayers earning $33K a year or less, only paying 3% of total taxes paid", is as or more despicable than the liberal "war cry" of "tax the wealthy" and equally a "class warfare" tactic. Calculate the tax burden of fed, state, fica withholding, + average living expenses including inflation on a $33K annual gross income for a family of 2-4, does anyone honestly think they should pay more taxes. It's amazing that those 50% don't stop working, and go on the full nanny state bandwagon and collect up to an estimated $30-35K in overall benefits.

        Let's all get off all the finger pointing and name calling tactics and come up with solutions and compromises that will start solving the problems.

        • Bobbie says:

          Numbers don't lie but those calculating them can. The government consists of paid people, why are the tax payers obligated to put out more for government pay when the tax payers aren't getting increases because of government and their unconstitutional spending? What specific, urgent, desperate, reason is there that the president wants more money where he should respect people do for themselves? The President is a good con many people fell for but hopefully wizen up to.

    13. Curt Krehbiel says:

      Obama's goal is to destroy all vestiges of capitalism and freedom and create another communist "heaven" like Cuba, Venezuela, and Russia, et al. He will dictate and there will be no more elections or free choice. He will succeed in his goal if re-elected in November.

    14. Ken Jarvis says:

      Tax the Rich,
      They have the $$$.

    15. Gary from Alaska says:

      "More bad news for the Obama economy," and good news for Obama, if he's intent on "transforming America," into the Third World Nation "he" has as his goal.

    16. Term Limits, Baby! says:

      Our freedom destroyer and food-stamp president in the oval office has no new ideas or desire to improve our economy. He wants everyone dependent upon big government. This is all he can offer: Spend more money, increase the number of people dependent on government handouts, raise taxes, and punish the wealth creators in order to pay for it. His incessant, negative, hateful, punish-the-rich message is not that of a president who believes in and promotes the American dream.

    17. Our freedom destroyer and food stamp president in the oval office has no new ideas or desire to improve our economy. He wants everyone dependent upon big government. This is all he can offer: Spend more money, increase the number of people dependent on government hand outs, and raise taxes and punish the wealth creators in order to pay for it. His incessant, negative, hateful, punish-the-rich message is not that of a president who believes in and promotes the American dream.

    18. JIM says:

      I continue to struggle with how our media just doesnt do it s home work. Period. The facts as layed out are not hidden any where.. But they are continue to ignore them? Doeskin any one of our media including Fox have the guts to call this guy on his lies? Thats what they are … Lies.. I dont get it….
      The only thing I can think of that makes sense is that our media believes in the HUGE government theory.. It doesnt work!!

    19. Handidude says:

      Who is John Galt.

    20. Marktlv says:

      Mr. Buffett, for reasons unknown, has allowed his name and reputation to become associated with bad taxing policy, and irrational ideas driven by class warfare. One must ponder if Mr. Buffett, along with many of the ultra rich who lean heavily toward larger government involvement and power in our free enterprise economy, are doing so for direct personal gain, or out of some form wealth guilt. Whatever the reasons, it raises questions of Mr. Buffett's ability to continue to make sound judgements. Having investigated many possible options for investing what wealth I have–mostly retirement savings, I can no longer endorse any investment to which Mr. Buffett is personally or otherwise attached. Should the Buffett rule somehow become law, I fear we will see a gross increase in the protection of personal assets–possibly through less than legal means, and not by the ultra rich of society, but by average hard working Americans who are seeing more and more of the rewards for their hard work and risk, taken from them!

    21. Jeff Dover says:

      Okay, we need to replace Obama. But what's up with Romney? I just heard him on Fox News saying that "it's my job to get Americans working…"

      No, it is not!! That's the private sector's job! What's he doing telling Americans that that is what the presidency is for?

      It's the job of the presidency — and congress — to provide the internal and external stability for business, enterprise and the conduct of our lives such that the private sector can do its job and conduct its business. We've already seen the horrendous damage done by the quantitative easements, stimulae and other Fed and Washington-authored abuses of our currency and meddling in the details of our economic life, not the least of which was the economic disaster of 2008 which they can take full credit for. They need to view themselves as facilitators, not creators. If they stick to their constitutional responsibilities instead of getting "involved" as Romney is suggesting he will do, they will accomplish what needs to be accomplished.

      Please, Americans, drop the idea that "solutions" come from Washington. They come from us. Washington is there only to provide the peace in which to create those solutions. Get them out of the details. They're not competent, none of them.

    22. boberic says:

      I have had enough of all this "fairness" crap. Where is written that life is fair. After all some people are better looking than others. Is that fair? Some are smarter, is that fair? Some are much better athletes ( I would love to play center field and bat 400 in the majors) is that fair? Some are better at earning a living and earning money, is that fair? What some super rich guy pays or doesn't pay in taxes has absolutely no bearing on my paying my bills or effect my lifestyle. The second sentence should have started with " where is it written, sorry for the typo.

      • Paul Cvengros says:

        Fairness seems to be Obama's favorite word. Perhaps he could explain how nearly 50% of Americans paying absolutely NO FEDERAL INCOME TAXES is "fair".

    23. Blair Franconia, NH says:

      The Buffett Rule WON'T work.

    24. Roger Grossel says:

      I can't believe that Heritage is also being duped by the shell game of "lower tax rates".
      The issue is taxes PAID. Does Buffet's secretary pay more taxes than Buffet? Certainly not.

    25. Dave Raymer says:

      Warren Buffet will continue to pay less than his secretary … he'll simply adjust things again. As I understood it, he draws almost, or no, salary, thereby avoiding federal income tax. He lives off his extensive investment portfolio, paying only capital gain tax (which is too high in my opinion, its a double tax). This is all smoke and mirrors to fan the flames of class/race warfare. Distract, divide, and destroy.

    26. Dah! I must be stupid. I just looked at the instructions for Income Taxes for 2011 for the 1040 Form. I looked at the 2011 Tax Tables. If my status was single and I earned at least $10,000 in 2011, then I would owe $1079 in taxes. If my status was single and I earned at least $100,000 in 2011, then I would owe $21,610 in taxes. You are right Mr. Obama, the rich pay less than the poor in taxes. Wait, Mr. Obama, maybe not? I think you are not telling us the truth.

    27. Roger Crassi says:

      "The President says, 'This is not about a few people doing well'" He let the cat out of the bag. His plan is not about everyone doing well. Socialism has never been about everyone doing well. It is about the Elite (of which the President considers himself among) living in abundance while all the remaining population live on a poverty level. Government cannot make everyone wealthy, but it does have the power – at this present time – to bring everyone else to the lowest common denominator. Look at England and Europe. The next step beyond Socialism is Communism! "A Government that is big enough to give you everything you want is big enough to take everything you have."

    28. Victor Rivera says:

      You guys sound like a broke record! Moreover, you guys can't be serious that by not leveling the playing field (e.g., sparing the rich) that somehow will trickle down and fuel the economic recovery! Please….we already have seen what that mentality has done to our country! What a short memory we have (e.g., Bush policies), especially the impact that we are still dealing with!

      • Victor, you must be a lot younger than I. You remember something about Bush, I cannot be sure what that is? But I am a lot older. I remember John F. Kennedy, as President. He had a bad economy. He lowered taxes. Then the Government collected more in revenues and the economy improved. You are right, we should learn from history–if that is what you were trying to say?

    29. Inverbrass says:

      Barack Obama, affirmative action at its best and ugliest!

    30. Robert Winters Sr says:

      When are we and the conservative groups going to say enough is enough? How long does the conservative movement plan on watching the destruction of our nation? Where is the outrage? Where are the calls for impeachment? Are we waiting for the most corrupt, fraud ridden election in the history of the United States to stop the disaster that is in the White House? As a member of the Heritage Foundation, I have reached my breaking point. I guess it will be up to the Tea Party!

    31. Cap Troi says:

      Buffett Rule would provide cover for only one day's spending deficit.


    32. dean gilchrist says:

      I only wish the republicans would throw the democrats a crumb by supporting a modest increase for the "wealthy" and thereby get them off this ridiculous "fair share" campaign.

    33. charles dulaney says:

      since there is so much discussion about the tax rates of buffet vs. his secretary. we should demand her to have her income and financial holdings made public. if she has been with him for years and has recieved stock or purchased stock she may have a net worth far beyond what most people think. thus she may not be the over taxed secretary victim the president keeps holding up to the nation. perhaps she is not paying her fair tax share either as the president defines fairness in order to transfer wealth to the government the way he desires.

    34. R. Thomas says:

      Have they abolished the Alternative Minimum Tax? When I thought I was going to pay 15% long term gains I discovered under the AMT after, I think it was $142,000, the rate was 26% bell curved to 28% and back to 26%. Add 6% state tax and I paid much more than expected. The IRS ought to check Buffet's return if he is only paying 15%.

    35. I'm gonna keep his cronies from coming after me by simply saying….he is a piece of work. His goal is to destroy OUR COUNTRY, NOT HIS

    36. ThomNJ says:

      GREAT PIECE – some passion for a change! This one definitely gets the link sent around!

    37. Tatersalad says:

      I have listened to The Presidents remarks and statements on TV today and his request to write my Congressman on taxing the rich relating to his so-called "Buffet Rule".

      I believe this is just a big scam by him, just like cap & trade, climate change and Agenda 21. Taxing the rich more at higher rates is class warfare being created just like Nazi Germany did and even if taxes were raised, it will not cover any deficits that we have. Just cut spending and the country will get back on track. Very simple.

      The President can not have it both ways on this Buffet Rule that he whines about.

      Warren Buffet on the Buffet Rule: http://www.youtube.com/watch?v=koDhgSLa-Wk

      Obama trying to explain his concept: http://www.youtube.com/watch?v=0VnwRo7DrNM

      Evidently the "Buffet Rule" means that a person doesn't have to pay any taxes. Which way is it Mr. President?

      Please do not support any raising of any taxes on anyone! Read my lips: "No new taxes"!

      Thank you for your time and concerns.

    38. Gill O’Teen says:

      How about we raise the tax rate to 'all your money' on everyone who publicly calls for raising taxes – except me, of course! My totally unofficial calculations estimate that while this would do little to solve our overspending problem, we would cut the environmental damage from windy gas bags to zero.

    39. Gary Sheldon says:

      Often when a politicians lips are moving they are misdirecting and manipulating an audience. EVERY time Barry Soetoro's lips are moving odds are very good that he is lying.

    40. Lloyd Scallan says:

      More and more Americans should now see the true Obama. How can any free thinking person in this nation not see what Obama's objective is? He said it to joe the plumber; wealth distrubition! Anyone that believes Obama's plan will only effect millionairs is a complete fool. About a year ago, Obama crowed this tax would help the national dept. But yesterday, he now changed his objective to "fairness". It's all a scheme to reach his true goal. When government controls everything and everyone, every penny anyone makes goes into the government coffers to be distributed to who the government chooses, not the ones that earned it. It's called communism.

    41. toledofan says:

      Wealth redistribution, race baiting, raising taxes and spending even more are the common threads for this entire Administrations existance. The disregard or the distain of the Constitution, the entire lack of leadership and the arrogance of Obama and his ideology towards all American ideals and our freedoms is just appaling and pathetic. It's like we've been watching the same old reruns over and over again for the past 3.5 years. What is almost beyond comprehension is that there are actually people who think this guy is doing a good job. Go figure.

    42. David says:

      Quoted form this post: "Then there’s the inconvenient fact that if you look at only the last level of tax, the data show clearly the highest-earning families and businesses in America are already shouldering the vast majority of the country’s tax burden. Heritage’s Curtis Dubay writes that the top 1 percent of income earners — those earning more than $380,000 in 2008 — paid more than 38 percent of all federal income taxes while earning 20 percent of all income. Meanwhile, those in the top 10 percent ($114,000 and above) earned 45 percent of income and paid 70 percent of all taxes. By comparison, the bottom 50 percent of income earners — those earning less than $33,000 — earned 13 percent of all income and paid less than 3 percent of federal income taxes." I wonder if Mike Brownfield can dig out some more statistics. In my mind, what seems to be missing is the value of food stamps, welfare, disability payments, SSI, etc… (payments going directly to people) not included in the "income" of the bottom 50 percent. The reason is that these payments really are a form of income. What percent of federal income taxes would the bottom 50 percent be paying if these payments were included – less than 1%?

    43. Dan Cullen says:

      Comments left 4/11/2012 on:
      Morning Bell: Buffett Rule 101
      by Mike Brownfield, April 11, 2012 at 9:23 am http://blog.heritage.org/2012/04/11/morning-bell-

      In reaching the hearts and minds of the public, we need themes that are quick and easy to understand and with which most voters sympathize.

      The President advocates:
      "The Buffett Rule,"
      which without detailed analysis sounds reasonable to many people.

      Opponents should counter and advocate two changes:
      1) "End double taxation"
      2) "Adjust capital gains and losses for inflation."

      These also sound good to most people and are good tax and economic policies, on their own and as necessary amendments before the Buffett Rule can be considered. (Even if the Buffett Rule is dropped or defeated, these should be important tax and economic platform planks.)

      This article makes the case for Ending Double Taxation. It should be hammered on in any forum during the campaign and should be introduced as an amendment to the Buffett Rule.

      Warren Buffett himself, in this year's report to his shareholders, argues effectively though perhaps unintentionally for Adjusting for Inflation. He shows how the taxation of non-adjusted gains results in net losses on basic savings using examples that everyone can understand. His own words argue the case, and he must either modify the Buffett Rule or expose himself as a rank hypocrite. Adjusting for Inflation also should be hammered on in any forum during the campaign and should be introduced as an amendment to the Buffett Rule.

      This turns the tables on the advocates of the Buffett Rule. While some voters support Tax the Rich, most voters support Adjusting for Inflation and many voters support Ending Double Taxation.

      Should the House and Senate vote on the Buffett Rule after these amendments have failed to pass, votes against the rule would be votes, not “for millionaires,” but for reforming the tax system in a broadly supported, fair and reasonable way.

      Heritage and its supporters can help make this happen by reaching out to every potentially sympathetic Senator and Representative and, of course, to Mr. Romney.

    44. JohnLeeHooker says:

      Enter text right herea! apparently the thief in chief foes not know or does not want us to know that buffet's holding company – berkshire hathaway – OWES A BILLION $'S IN BACK TAXES.

    45. Ray1547 says:

      What exactly is FAIR SHARE taxation?– We don't know because it has never been defined! Does that make any sense whatsoever? How can we design a tax system without 1st defining the term?–The only way to determine what FAIR SHARE taxation is or should be is to begin by totaling up absolutely all forms of income. THAT means all pretax earned income, capital gains income, dividends pd, retirement, SS payments, inheritances and anything else that could be considered to be income. Allow NO loopholes in the course of totaling the income because we are seeking GROSS PERSONAL INCOME for income tax purposes. Realize the significance of a few facts.
      1-It takes only about $350K to get to the top 1% AGI threshold level. From that point upward to $1 bil (which some do earn when ALL forms of income are totaled up) the span of income is $999,650,000. Assuming for demo purposes that the very top earner claims $1 bil in GROSS PERSONAL INCOME (Income before any deductions or loopholes are allowed) we could easily divide just the upper 1% into 100 or more brackets based upon GPI. 100 brackets within the top 1% alone would mean each bracket would be about $10 mil vs the entire lower 99% claiming up to $350K being contained WAAAY down BELOW the bottom of the 1st bracket. Why not look at establishing a tax schedule based upon a CONCEPT similar to that which I just offered? Why can we not have 1000 tax brackets based upon GPI that encompasses ALL forms of income? It may sound silly BUT is it really? The answer is a resounding NO. We need to look at all proposals for income tax reform and most of all we need to 1st establish a definition for what fair share taxation needs to be. Only then can we establish a tax system that is fair and equitable.
      Consider this->If we had 1000 tax brackets with the top earner claiming $1 bil with the entire lower 99% earning up to $350K AGI there would be 1000 brackets of $1 mil per bracket putting the entire lower 99% in the bottom 3rd of the 1st bracket! Do we need to restructure our tax system? I am not saying we need 1000 brackets of $1 mil each but I am saying we need MAJOR tax reform in a big way!
      Be it known that we have NEVER required that those who do not earn much to pay the INCOME tax so why is it such a big deal now? The fact is the upper 1% has increased their SHARE of after tax income by 275% (A CBO stat) while almost all other brackets have lost share so it follows that the upper end will pay more in income taxes BUT that does not mean the system is either fair or equitable! http://teapartyorganizers.com

    46. Fred Yates says:

      Dear Heritage, I love you and support you, but sometimes you use toooo many words when a simple picture would do a thousands times better.

      You know "A picture is worth a thousand words" adage. Show in a vertical bar chart the percentage of taxes paid vs income. Ten years of those pictures would speak volumes I could send them to all my email recipients.

      We live in an instant world, give us some instant information we can share with our progressive acquaintances. Make sure you give the link to the source so they can verify the data for themselves.

    47. Vince De Young says:

      The President,s Robin Hood intentions raise a moral question–which is,of course, the question of taking or stealing from one person to give to someone else. A majority vote in favor of stealing doesn't make it right. President Obama also conveniently and probably intentionally ignores the difference between actual rates vs. marginal rates. Actual rates (total taxes divided by total income) is a function of deductions, exclusions, and tax credits. If a person gives a lot to charity (as Mitt Romney) or has high medical costs, mortgage interest deductions, IRA contributions, is married, etc. etc, then his/her actual taxes a a percentage of total income appears lower. All of these deductions have valid purposes and uses behind them. Also, the lower tax rate on dividends and capital gains and the zero tax on municipal bond interest involve policy questions that have been long settled–the policy being these rates are set to encourage investment in businesses and in communities which in turn create jobs and more tax revenues..

    48. Bruce Thompson says:

      The Republicans and Heritage just don't get it. Pass the 4.6 billion!! It is a nit!!! It takes Obama's main talking point away. Nobody believes that the 4.6 billion is going to make a dramatic difference in the growth of the economy. We need to cut trillions and the Republicans are concerned about 4.6 billion. Ridiculous!!! My first vote for President was for Ike. He said to beware the military industrial complex. He should have said beware Congress (both parties) – two Do-nothing groups in my view. My guess is that the Tea Party average folks would agree with me but the new Republicans in the house are too partisan and stupid to recognize that there has to be some give to get anything done.

    49. Obama is a cancer on lady libertys breast!

    50. peyton reed says:

      You should add to your article the reason for the lower tax rate on capital gains, i.e. to stimulate investment!

    51. Guest says:

      Those of us that have worked hard all our lives are tired of supporting the freeloaders that have not and will not work. They always have their grubby hand out for more.

    52. Javelin47 says:

      I understand Buffet, during the same pronouncement, said that increasing taxes isn't enough, you must cut spending. Wonder why this part is MIA?

    53. JoAnne Strausner says:

      Nothing is mentioned about Mr, Buffoon not paying taxws and is fighiting with the IRS for unpaid taxes of course his secretary pays more taxes cause he doesnt pay his,,,,,,,,,,,,,

    54. rmgdnnow says:

      I was very disappointed that the description of the "Flat Tax" was more of a blurb than a listing of the provisions of the proposed law. I am 83 and from what I've seen, my taxes will go up, not down; my retirement income is not so much that I can tolerate any increases.

    55. Jose Luis Lira says:

      President Obama should know better than to talk about “fairness”. But a lying hypocrite knows not shame. And rather than pointing a finger to Mitt … “for not paying his fair share on taxes” .. I’d like to hear Obama explain to the American people his reason for ignoring the fact that, some members of his staff and associates have been found to be criminal tax-evaders. Bite on that Mr. President.

    56. Don says:

      Good article: Another example of a misunderstood tax is the “Senior Citizen Tax” which is the taxing of Social Security on Line 20b of the 1040 Form. For example, if you take $1,000 out of an IRA your taxable income could increase up to $1,850 because 85% of your Social Security benefit is taxable. As a recent retiree I found out the hard way that my marginal tax went up to about 55%, even though I was in the 15% Federal tax bracket, because of the compounding effect of taxable Social Security when you are in the Tax Bubble. After retirement I started a company and had to pay in 15% to Social Security for self employment tax; Minnesota marginal tax 13.04% (7.05% Bracket); Federal Marginal Tax Rate 27.75% (15% Bracket); for a total of (15 + 13.04 + 27.38) = 55.42%. To clarify the Federal Marginal Tax Rate = (15 x 1.85) = 27.75%. By the way, Federal employees retiring under FERS (Federal Employees Retirement System) are exempt from paying this “Senior Citizen Tax” because it only applies to Social Security and Railroad Retirement Board recipients. Its time to repeal this ridicules tax on the Senior Citizens.

    57. 2D Okie says:

      My Goodness!!! This was a SHOCK!!!???? The Commie-in-Chief better hope that dead horse doesn't quit on him

    58. Dan Ward says:

      Here is a good lesson in why socialism does not work…basic human nature.

    59. S. Ketner says:

      How about if we quit sending billions of ddollars to those foreign countries that proclaim they hate us? We need to keep more money here in this country instead of making millionaires in foreign countries! OUR people need it here!

    60. MtDewy says:

      The government is its own "special interest group" and will do anything to anyone to protect itself. It does not represent the will of the people it represents itself and what it needs to achieve control of the people and complete dependency on it by the people. Once the population is dependent upon the government, they are the masters and the public will bow to their will to continue to receive their sustenance. 90% of the population is too comfortable with their flat screen tvs, internet, twitter, facebook, etc to pay any attention to the erosion of their rights and freedoms. As long as the government gives them the illusion of freedom, they will sheepishly follow orders.

      Oath Keepers is a non-partisan association of current and formerly serving military, reserves, National Guard, veterans, Peace Officers, and Fire Fighters who will fulfill the Oath we swore, with the support of like minded citizens who take an Oath to stand with us, to support and defend the Constitution against all enemies, foreign and domestic, so help us God. Our Oath is to the Constitution and not to any PRESIDENT TYRANT OR DICTATOR!! http://www.oathkeepers.org/

      Citizens can support our Constitutional Sheriffs military and law enforcement by being a member or donate to – Oathkeepers.org

      We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

      What phrase are we on in this picture? It's an idea worth contemplating. Read again the stated purposes of the constitution and think about what they mean:

      In order to form a more perfect Union – Because we want a better country to live in (than what we had before):
      Washington State Issues 12,000 Gun Permits in March: Up 60% from Monthly Average (VIDEO) http://www.guns.com
      A recent spike in burglaries and home invasions has Washington state residents lining up to get concealed carry permits. Meanwhile, local gun shops around the country are reaping the benefits of a huge increase in sales.

      Teach your kids about the Constitution using Youtube videos that week!!!
      Get a bullhorn and scream it at the top of your lungs driving around town!!!
      Get a George Washington Costume and wear it that week!!!
      Order Constitution pocket hand outs through http://www.oathkeepers.org/

      Go to Hillsdale College on line and take a free constitution class.
      Hillsdale College was founded in 1844 by men and women who proclaimed themselves “grateful to God for the inestimable blessings resulting from the prevalence of civil and religious liberty and intelligent piety in the land,” and who believed that “the diffusion of sound learning is essential to the perpetuity of these blessings.”

      http://youtu.be/VebOTc-7shU – Fall of the US Republic
      http://youtu.be/eAaQNACwaLw – Obamadeception
      http://youtu.be/8NJYNgM_IuE It is very important for us all to realise that we're living under a simple but clever system that has been designed to contain revolution whilst projecting the illusion of being a free
      RON PAUL 2012 The next President of the (united) STATES of AMERICA!

      Teaching Kids the Preamble to the Constitution
      Recently I spoke to my granddaughter's kindergarten class. Her name is Liberty and yes, she was born on the 4th of July. Here she is standing next to me as I teach actions that help us remember the preamble to the Constitution:

      Here’s what you really need to know about Obama’s plan.

      Under the Buffett Rule, businesses and families earning $1 million will pay a minimum 30 percent effective tax rate. The President says those Americans aren’t paying enough, and as proof he points to billionaire Warren Buffett’s secretary who reportedly pays a higher tax rate than her uber-wealthy boss. But right from the get go, the President is distorting the facts. THE REALITY IS PEOPLE ARE NOT BEING PAID ENOUGH EXCEPT THE ELITISTS. Wages should be 125% higher than what they are and CEO pay should be 300% lower… but nobody seems to get it except the Unions!!

      Heres an American HERO. Allen West: 'I‘ve ’Heard’ 80 House Dems Are Communists, and Obama is ‘Too Scared’ to Debate Me' http://www.theblaze.com


    61. Soldi says:

      Be just like Buffett – he doesn't p;ay any tax – He owes 10 mil in back tax's what hypocrite he is – but look who his buddy is . the old saying 'BIRDS OF A FEAHER FLOCK TOGETHER" BUFFET IS FULL OF BS HW SHOULD BE RUN OUT OF THE COUNTRY – HE'S NO BETTER THAN GEO SOROS

    62. Thang Vo says:

      For those of you who support the Buffet rule but have no idea what it means, here's a quick lesson.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.