Despite the push from President Barack Obama, his campaign team, and Democrats, the 30% tax on millionaires — dubbed the “Buffett Rule” — unsurprisingly went down yesterday evening in the Senate:
The Senate rejected consideration Monday of the “Buffett rule ,” a key election-year Democratic initiative that would impose a minimum tax rate on those making more than $1 million per year, as a philosophical debate over taxes that will define this year’s elections occurred on Capitol Hill.
Democrats were unable to get the 60 votes necessary to break a filibuster and proceed to a full consideration of the measure, with the Senate voting 51 to 45 to move ahead. The vote was largely along party lines, although Republican Sen. Susan Collins (Maine) voted with Democrats to allow the measure to proceed and Democratic Sen. Mark Pryor (Ark.) voted to block it.
As noted above, it was mostly a party line vote, but if you want to see how your Senators voted you can view the roll call here.
Unfortunately, the vote doesn’t mean the end of this charade over tax hikes. We’ve noted before that the Buffett Rule wouldn’t have brought in much in terms of revenue, approximately $47 billion over 10 years — or just under $5 billion annually; less than half a day of spending. And that small amount of revenue would literally be nothing compared to the trillion dollar budget deficits we’ve seen coming out of Washington in recent years.
Last month, the Joint Committee on Taxation released a report showing that the so-called “Buffett Rule,” a new tax supported by President Barack Obama and congressional Democrats on the wealthiest Americans, will not work as intended as those targeted would likely find a way around it. But despite this, Senate Democrats are expected to bring the tax to floor next week, hoping to use it as a tool to hammer their Republican counterparts:
White House press secretary Jay Carney said a Senate vote next week on the so-called Buffett Rule will not be an empty gesture even if it is defeated in the upper chamber.
Carney insisted the White House goal was to win passage of the measure, but also acknowledged the vote could accomplish the political goal of hurting Republicans, something that could also lead to its eventual passage.
“I would simply note two things,” Carney said at Monday’s daily White House press briefing.
“One, the piece of legislation we’re talking about here on its face has broad support across the country,” he said. “Two, there is an opportunity here, because of the 60-vote threshold, to demonstrate Republicans listen to their constituents.
“That’s what votes do — they put senators on record,” Carney said. “We will certainly see how senators handle that, the opportunity to vote on the so-called Buffett Rule. The goal is the passage of the resolution.”
President Barack Obama insists, in the name “fairness,” that a new tax on the wealthy is needed. When discussing this, he frequently points to Warren Buffett, whose secretary pays more as a percentage of her income than her billionaire boss. The argument is misleading, however, since Buffett doesn’t pay taxes on wages like his secretary, rather capital gains taxes, which are already taxed once at the corporate level.
However, a new report from the Joint Committee on Taxation shows that the so-called “Buffett Tax” wouldn’t likely work as intended:
A lot of millionaires likely would find legal ways to avoid President Barack Obama’s so-called Buffett Rule, according to a new congressional estimate. That means the proposed new tax on the wealthy would raise only a relatively small amount for the deficit-plagued government, and could diminish its heft as a political weapon in 2012.
The Buffett Rule–spelled out in Mr. Obama’s State of the Union address–is named for the billionaire investor Warren Buffett, who advocates higher taxes on the very wealthy. It would impose a 30% minimum tax rate on people making more than $1 million a year. As currently envisioned, it would be an additional tax on households that didn’t pay at least the 30% minimum rate through their individual income taxes and employment taxes.
As you know, President Barack Obama has made Warren Buffett’s tax bill a frequent talking point, often mentioning that his secretary pays a tax higher rate. Of course, Obama and his apologists don’t mention that they are taxed different — Buffett being taxed via capital gains.
The debate is interesting in that an official in the Obama Administration has said that the president will propose a reduction in the United States’ corporate income tax. That’s certainly welcome news given that our corporate tax rate is among the highest in the industrialized world, but it’s also at odds with Obama’s frequent class warfare rhetoric because it would put more money into Warren Buffett’s pockets:
Reuters reported late Friday, citing two anonymous sources, that President Obama will call for reducing the U.S. corporate income tax rate to “the high 20 percent range” from 35%.
During his State of the Union address, President Barack Obama telegraphed his intent to wage class warfare against the rich, hoping to revive the populism that helped put him in office at the height of the financial crisis.
Obama once again pushed for the so-called “Buffett Rule” — after Warren Buffett, who pays a higher tax rate than his secretary. The rule would tax individuals making over $1 million at a higher rate, out of “fairness.”
Writing at the Wall Street Journal, economist Stephen Moore asks President Obama about “fairness,” taxes, and his economic policies that discourage success:
President Obama has frequently justified his policies—and judged their outcomes—in terms of equity, justice and fairness. That raises an obvious question: How does our existing system—and his own policy record—stack up according to those criteria?
Is it fair that the richest 1% of Americans pay nearly 40% of all federal income taxes, and the richest 10% pay two-thirds of the tax?
Is it fair that the richest 10% of Americans shoulder a higher share of their country’s income-tax burden than do the richest 10% in every other industrialized nation, including socialist Sweden?
Is it fair that American corporations pay the highest statutory corporate tax rate of all other industrialized nations but Japan, which cuts its rate on April 1?
Is it fair that President Obama sends his two daughters to elite private schools that are safer, better-run, and produce higher test scores than public schools in Washington, D.C.—but millions of other families across America are denied that free choice and forced to send their kids to rotten schools?
Welcome Instapundit readers!
During a speech on National Prayer Breakfast at the National Cathedral, President Barack Obama went partisan (shocker!) in what is usually a bipartisan event by invoking Jesus Christ to justify his push for higher taxes:
President Obama offered a new line of reasoning for hiking taxes on the rich on Thursday, saying at the National Prayer Breakfast that his policy proposals are shaped by his religious beliefs.
Obama said that as a person who has been “extraordinarily blessed,” he is willing to give up some of the tax breaks he enjoys because doing so makes economic, and religious sense.
“For me as a Christian, it also coincides with Jesus’s teaching that for unto whom much is given, much shall be required,” Obama said, quoting the Gospel of Luke.
I’ll admit upfront that I believe raising taxes is a terrible idea. It’s even worse of an idea in economy that just now seems recovering from an severe downturn, a point that the Congressional Budget Office recently echoed. But President Obama’s invocation of Jesus and religion to push tax hikes is sickening and it makes him no different from someone like Rick Santorum, who frequently uses his faith to justify authoritarian social policies.
In case you haven’t already, Mitt Romney, the day after a very strong showing in Florida, stuck his foot in his mouth during an interview on CNN by saying that he is “not concerned about the very poor”:
After winning the Florida primary, GOP presidential nominee hopeful Mitt Romney explains to CNN anchor Soledad O’Brien that he is focused on a particular portion of the American population in his campaign. Romney says, “I’m not concerned about the very poor. We have a safety net there. If it needs a repair , I’ll fix it. I’m not concerned about the very rich…. I’m concerned about the very heart of America, the 90-95 percent of Americans who right now are struggling.”
O’Brien asked him to clarify his remarks saying, “There are lots of very poor Americans who are struggling who would say, ‘That sounds odd.’” Romney continues, “We will hear from the Democrat party, the plight of the poor…. You can focus on the very poor, that’s not my focus…. The middle income Americans, they’re the folks that are really struggling right now and they need someone that can help get this economy going for them.”
Both anti-Romney conservatives and Democrats reacted to the comments, using them as another example of Romney being out of touch. Other, more reasonable conservatives, are just concerned that it feeds perceptions about Romney. For example, the Washington Examiner’s Conn Carroll writes:
The race for the Republican presidential nomination has turned ugly over these past few weeks thanks primarily to former House Speaker Newt Gingrich (R-Ga.) and former Senator Rick Santorum (R-Penn.), whose campaigns have resorted to an “everything but the kitchen sink” smear campaign to destroy former Governor Mitt Romney (R-Mass.). Both Gingrich and Santorum have attacked Romney’s success in the private sector by criticizing his work at Bain Capital and relentlessly demanding that he release his tax returns. Gingrich’s campaign upped the ante when it unleashed a robocall slamming Romney for vetoing additional funding for kosher kitchens in nursing homes as Governor of Massachusetts. Apparently fiscal restraint has now joined business success in this race’s growing list of taboos.
Former House Speaker Newt Gingrich (R-Ga.) has been under fire since last week’s South Carolina GOP primary debate for calling President Obama a “food stamp president.” Progressive critics have accused Gingrich of pushing hatred and racism to turn voters against Obama. But as a CNNMoney article makes clear, more Americans have been added to the Supplemental Nutrition Assistance Program (SNAP) under Obama than under his recent predecessors and Obama’s stimulus package made it easier to qualify for SNAP. Approximately 14% of Americans — 1 in 7 — were on food stamps last year. We spent $75 billion on food stamps in 2011, an increase of about $40 billion in just three years, and according to Heritage Foundation senior research fellow Robert Rector overall spending on our 70 welfare programs has increased by one-third under Obama. These are facts and they would still be equally true if President Obama were white.
Last night, President Barack Obama was supposed to speak on the State of the Nation, but in usual fashion, he turned it into a campaign speech. In case you missed it, you can watch it here or read the transcript. Don’t forget to watch or read the Republican response offered by Indiana Gov. Mitch Daniels.
There was nothing in the speech that was ground-breaking. It was more of the same tired themes, such as his divisive class warfare rhetoric (much of it was inaccurate) and tearing down businesses. No substantive defense was offered for the failed economic policies that he continues to push.
Some of the policy experts from the Cato Institute, the Washington-based libetarian think thank, parsed the themes that Obama relayed and found much to be disappointed in: