As Hillary Clinton lays out her economic policy vision one vague speech at a time, the Democratic presidential frontrunner has leaned heavily on rhetoric and shied away from hard details. But she’s made one thing very clear: she really wants to raise taxes.
Clinton kicked off her economic agenda rollout by professing her support for the “Buffett Rule.” Coined after billionaire Warren Buffett’s canard that his tax rate shouldn’t be lower than his secretary, the Rule seeks to create a progressive tax system.
Except we already have a steeply progressive tax system.
The fallacy that is the Buffett Rule started out as a talking point during the 2008 presidential election and grew into a full-on policy proposal in 2012. After President Barack Obama declared that “millionaires and billionaires” should pay no less than 30 percent of their income in taxes during his 2012 State of the Union address, his administration released a proposal to implement the Buffett Rule.
But even the Obama Administration had to admit, buried at the very end of policy proposal, that America already has a progressive tax system and that “high income Americans do pay more.”
The Buffett Rule is rooted in the false, but frequently repeated claim that middle-income families and individuals pay a higher tax rate than upper earners. Marketed as a “principle of tax fairness” by the Obama Administration, the plan solves a problem that we don’t have.
The country’s top earners already pay the highest tax rates in the country and contribute the majority of the tax revenue. The top one percent of households pay a 29 percent total federal tax rate, compared to 11 percent for the middle quintile of households.
The top 1 percent of earners pay 24 percent of all federal taxes and the top 20 percent of earners pay a whopping 68 percent of all federal taxes.
Unfortunately for the Clinton campaign, even if increasing taxes on high-income earners was a reasonable solution to solve America’s economic problems, the country doesn’t even have enough “millionaires and billionaires” to raise taxes on. According to the nonpartisan Congressional Budget Office, Clinton would have to double the tax rates for everyone in America, not just the wealthy, to even make a dent in the debt.
Two years after the Obama Administration released its proposal, the plan’s namesake explained what the actual Buffett Rule is, “I will not pay a dime more of individual taxes than I owe, and I won’t pay a dime more of corporate taxes than we owe. And that’s very simple.”
Apparently no one told Clinton about Warren Buffett’s change of heart.
Raising taxes on Americans isn’t a solution to our financial troubles, but if Clinton truly believes that taxing wealthy individuals is the road to economic prosperity, she is more than welcome to put her money where her mouth is by writing a check today to the United States Treasury Department, which accepts donations for those people who don’t think they pay enough already.