New York City Mayor Michael Bloomberg knocked President Barack Obama’s proposal to increase taxes on the rich, noting that there has been some dishonesty in the rhetoric used by the White House and Warren Buffett (emphasis mine):
Mayor Michael Bloomberg dismissed President Obama’s proposal to raise taxes on people who make more than a million dollars a year.
“The Buffett thing is just theatrics. If Warren Buffett made his money from ordinary income rather than capital gains, his tax rate would be a lot higher than his secretary’s,” he said.
“I think it’s not fair to say that wealthy people don’t pay their fair share. They pay a much higher percentage of their income, they have a higher rate than people who make less,” Bloomberg added.
That is one of the great myths about higher income earners like Buffett. They don’t make their money the “normal” way. Earnings from investments are double-taxed already, once from the corporate income tax and gain from the capital gains tax; not to mention they wouldn’t bring in much revenue. And again, I’ll point to the great post by Megan McArdle, who noted that Obama’s tax hike proposal wouldn’t hit Buffett (emphasis mine):
[I]n the White House document that I read, I saw no proposal to set some sort of AMT on millionaires. Instead, it claims to do this, while rehashing a bunch of things that the administration has long proposed: allowing the Bush tax cuts to expire for those making more than $250,000; changing the treatment of carried interest income accrued from capital gains; and altering the treatment of deductions for very high earners. If all of these things were passed, guess who would still pay a lower effective tax rate than his secretary? Hint: his initials are WB, and he lives in Omaha, Nebraska.
Obama has been trying to get the focus off of the failure his economic policies, so the rich are his scapegoat. It’s laughable to hear him say that policies pushed by Republicans would “cripple” the economy, all voters need to do is take a look around and see who is failing.