The way President Obama speaks one would think that every millionaire in the United States uses dirty tricks and tax loopholes to pay less than the average middle class family. That's simply not true. Obama's campaign is predicated on class warfare and a deception of the American people.
An Associated Press report notes:
A lot gets lost in the rhetoric about the Buffett Rule, which would impose a minimum 30% tax on millionaires.And at the top of the list is this fact: Most millionaires already pay higher effective tax rates than just about everyone else.
Certainly, many people who earn at least $1 million a year pay an effective rate of less than 30%. But they still pay a higher percentage than most people further down the income ladder.
On the official White House website, there's a "tax rate calculator" that asks Americans to enter their tax rate. It will then tell you how many millionaires are paying a lower rate. Do you know your tax rate? It's probably lower than you think.
For example, I'm in the 25% statutory tax bracket, but I don't pay nearly that rate. Millionaires are in the 35% bracket, but almost no one pays a rate of 35%.
The Tax Policy Center has calculated average effective income tax rates for various levels of income. Americans earning $100,000, for example, are in the 28% tax bracket, but pay only a 10% effective rate on average. Millionaires, on average, pay a 20% effective rate on income.
As Josh Barro writes, the Buffett rule is a symbolic step in the wrong direction on tax policy.
A Buffett Rule would not simply mark a return to a time when tax burdens were higher on people with high incomes. It would entail enacting a new form of tax policy not used in other major countries and not used for any sustained period in the United States. It is very cavalier to contend that such a policy would not discourage investment.
Real tax reform isn't about creating new rules that complicate the tax code to raise small amounts of revenue. It's about eliminating loopholes and lowering and flattening tax rates. There are many legitimate plans in Congress that would do this - Rep. Paul Ryan has one, Sen. Pat Toomey has one, and even the Simpson-Bowles tax reform that raises more revenue than Republicans are willing to go for brings the top tax rates down dramatically.
The Buffett Ruse is a symbolic sham of a tax "plan" meant to stoke class warfare in the name of fairness. It's important for Americans to educate themselves on the issues and realize the dishonesty involved in Obama's campaign.
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