Obama to propose a “Buffett tax” while pushing jobs plan

posted at 12:00 pm on September 18, 2011 by Ed Morrissey

Talk about your mixed messages!  While Barack Obama goes on the campaign trail trying desperately to drum up support for a jobs plan that will cost $450 billion, the President will also deliver at the same time his plan to reduce the spiraling federal deficit and slow the runaway growth of the national debt.  And while claiming that he’s not engaging in class warfare, Obama wants to target a new tax at one segment of society in order to protect and amplify his redistributionist policies.  Care to guess what that segment of society is?

President Barack Obama, in a populist step designed to appeal to voters, will propose a “Buffett Tax” on people making more than $1 million a year as part of his deficit recommendations to Congress on Monday.

Such a proposal, among suggestions to a congressional supercommittee expected to seek up to $3 trillion in deficit savings over 10 years, would appeal to his Democratic base ahead of the 2012 election but likely not raise much in revenues.

White House Communications Director Dan Pfeiffer said in a tweet on Saturday the tax would act as “a kind of AMT” (Alternative Minimum Tax) aimed at ensuring millionaires pay at least as much tax as middle-class families.

The “Buffett Tax” refers to billionaire U.S. investor Warren Buffett, who wrote earlier this year that rich people like him often pay less in tax than those who work for them due to loopholes in the tax code, and can afford to pay more.

The AMT?  Say, isn’t that the “millionaire’s tax” that Congress passed decades ago that now has to be “patched” each year so as not to hammer middle-class families?  What a great model to use for the new “millionaire’s tax”!  And inevitably, it won’t generate “much in revenues,” which I’ll explain in a moment.

Besides, if Warren Buffett wants to pay taxes, he can start with the billion dollars his company already owes the federal government.

Let’s take a year-long look at the tax policy of this administration.  Before the midterm elections, Obama and Democrats refused to produce a budget because in doing so, they would have had to address the expiring Bush-era income tax rates.  In the lame-duck session immediately afterward, Democrats pressed to let the Bush tax rates expire, which would have created the biggest tax increase in history, or at least the top rates that would have hiked taxes on anyone earning $250,000 a year or more.  By December, Obama agreed to keep the rates as they are for the next two years — in order to get the economy going and job creation restarted.

Yet Obama immediately denounced his own plan and insisted that he would fight to raise those same rates in 2013, effectively killing any stimulating effect the deal might have had.  (Maintaining status quo was less about stimulation and more about avoiding damage, of course.)  Now, just as Obama wants to promote a jobs bill that contains a half-priced rehash of the Porkulus failure of 2009, he announces that he wants to seize more capital from the very people who we need to put capital into private-sector investments to create jobs.   This is especially true of this so-called Buffett Tax, which targets the very income derived from capital risk:

The Buffett Tax could help energize Obama’s base by highlighting a feature of the U.S. tax code that allows the super rich to pay lower rates of tax than less wealthy Americans because the bulk of their income is capital gains, dividends and the ‘carried interest’ earnings of hedge fund managers.

What happens when the cost of risk equals the cost of relatively risk-free income?  People stop taking risks and shelter their capital.  When capital stops being risked in new ventures, economic growth slows and stops, jobs either never get created or start disappearing, and we get stagnation or recession.  That capital doesn’t sit on the sidelines forever, either; eventually capital moves to other markets, which means that even when conditions improve, we won’t see that capital return to our markets.  On top of that, the vacillation on tax policy and hostility towards capital holders amplifies the incentives to move capital out of the US.

That’s why the “new AMT” won’t end up generating anywhere near what the Obama administration will claim.  It’s a nakedly political act designed to bolster Obama’s class-warfare demagoguery and credentials, and it’s a policy that will inevitably lead to a deeper economic crisis in the US.

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Actually, a Buffett Tax wouldn’t be a bad idea: a one-time wealth tax on 50% of the net worth of everyone worth over $25 billion. It would basically hit Buffett, Bill Gates and a few other superrich

You should tone down the class warfare against the wealthy. True, when the wealthy suggest a higher tax rate for persons earning more than $1 million per year, it’s an assault on the middle class… or something like that. After all, what do Buffet, Gates, and Jobs know about running companies or by extension, a large economy? It’s far better to listen to inexperienced right wing extremists when it comes to the best path for managing the economy.

bayam on September 18, 2011 at 6:00 PM

Since this is a pointless proposal, what happens now for the next 14 months.

rob verdi on September 18, 2011 at 6:30 PM

Call it the “Buffett-Geitner-Rangel et al.” tax…for all the Liberal Hypocrites who DON’T pay the taxes they OWE. The Democrats in Congress and the Administration and the bundlers for Obama alone could pay off the current year’s deficit…..

opaobie on September 18, 2011 at 7:27 PM

I’m ok with a new “Buffett” tax, so long as EVERYONE is taxed at the capital gains tax rate as Buffett, Steve Jobs, etc. are…Hey, wouldn’t that be a “flat tax”? How progressive of the obamanation!!!

Gohawgs on September 18, 2011 at 7:48 PM

Still think taxing the rich won’t hurt you? Watch this

http://www.xtranormal.com/watch/12450150/never-thought-about-that

flyoverland on September 18, 2011 at 8:00 PM

No, no, no. Obamao spelled it wrong. It’s ‘Buffet Rule’ – they can take as much of your money in taxes as they want, and come back for seconds and thirds if they need more.

Timothy S. Carlson on September 18, 2011 at 8:05 PM

Timothy S. Carlson on September 18, 2011 at 8:05 PM

FLOTUS will be mad, she doesn’t like buffet’s…Unless she’s in line…

Gohawgs on September 18, 2011 at 8:18 PM

Bayam you’re hilarious . Just because Buffet thinks the way he does is not a reason to brainlessly jump on board like you do. What a joke. At least you are consistent.

CW on September 18, 2011 at 8:28 PM

Just because Buffet thinks the way he does is not a reason to brainlessly jump on board like you do.

Why do you say it’s brainless to raise taxes on the wealhty to reduce the deficit? Even the Republicans on the bipartisan deficit commission have called for this type of tax increase. Then I forget- you’re more knowledgeable when it comes to Buffet regarding US economic policy. Or perhaps you can explain why Bank of America’s right-leaning management team practically paid Buffet $1 bil to attain his investment and tacit approval of the company’s long term fiscal outlook. Yes, highly valued by Wall Street and practically every finance expert in the world, but not intelligent enough for the far right, compared to Rush or Glenn.

bayam on September 18, 2011 at 9:41 PM

“Even the RINOs on the bipartisan deficit commission have called for this type of tax increase…Yes, highly valued by in-Obama’s-pocket Wall Street and practically every Crony Capitalist in the world….”

bayam on September 18, 2011 at 9:41 PM

FIFY

opaobie on September 18, 2011 at 9:49 PM

Crony Capitalist

That’s right, the great entrepreneurs who built empires from the ground up, like Buffet and Gates, are merely old school cronies.
Unless the entrepreneur has been approved by Michelle Bachmann or Glenn Beck, their accomplishments account for nothing.

bayam on September 18, 2011 at 10:03 PM

No, their records stand on their own. Are you happy with BOA’s business record lately? How about the Geniuses of Wall Street? “On a Clear Day, I Can See GOVERNMENT MOTORS”!!! By the way, those empires were built when entrepreneurs didn’t have to run a marathon wrapped in red tape while carrying a ton of regulations on their backs. Under today’s alphabet soup agency regulations, how many of them would ever have seen the light of day?

You really have a hate on for Michelle Bachmann or Glenn Beck, don’t you?

opaobie on September 18, 2011 at 10:11 PM

those empires were built when entrepreneurs didn’t have to run a marathon wrapped in red tape while carrying a ton of regulations on their backs

You tell me- what are the new regulations that will block the next Gates, Ellison, or Page?

People need to stop blaming the government and take responsibility for acquiring the right skills to compete in the global economy.

bayam on September 18, 2011 at 10:38 PM

On a Clear Day, I Can See GOVERNMENT MOTORS”!!!

GM is no longer controlled by the government. But I know, it would have been better to see a world of your fantasy ‘pure’ capitalism with American industry crushed and foreign countries dominating US auto sales. Too bad Obama had to save a few million jobs. That has to hurt.

bayam on September 18, 2011 at 10:42 PM

You tell me- what are the new regulations that will block the next Gates, Ellison, or Page?

bayam on September 18, 2011 at 10:38 PM

Are you serious? Start with the EPA and go in any direction…you won’t go very far because of your “carbon footprint”…then you run into the next alphabet soup agency, pay your fee, fine, tax, “protection money”, dues, or whatever they want to call it…then you run into the next alphabet soup agency,…….

GM is no longer controlled by the government.

No, they only own 28% of the stock and 100% of the shorthairs of the managers.

Too bad Obama had to save a few million jobs.

…yeah, right. I hear the Government Motors folks are getting a $5,000 “signing” bonus. Happy days are here again. The jobs Obama has “created or saved” are pretty expensive jobs; his “Green” jobs come in around $250K apiece.

That has to hurt.

opaobie on September 18, 2011 at 11:14 PM

Why do you say it’s brainless to raise taxes on the wealhty to reduce the deficit? Even the Republicans on the bipartisan deficit commission have called for this type of tax increase. Then I forget- you’re more knowledgeable when it comes to Buffet regarding US economic policy. Or perhaps you can explain why Bank of America’s right-leaning management team practically paid Buffet $1 bil to attain his investment and tacit approval of the company’s long term fiscal outlook. Yes, highly valued by Wall Street and practically every finance expert in the world, but not intelligent enough for the far right, compared to Rush or Glenn.

bayam on September 18, 2011 at 9:41 PM

What is it with you and this worship of “experts”? These same experts predicted all would be well with sub prime. They predicted unemployment wouldn’t go above 8% with porkulus. Yet for some unknown reason you continue to worship them.

angryed on September 18, 2011 at 11:20 PM

GM is no longer controlled by the government. But I know, it would have been better to see a world of your fantasy ‘pure’ capitalism with American industry crushed and foreign countries dominating US auto sales. Too bad Obama had to save a few million jobs. That has to hurt.

bayam on September 18, 2011 at 10:42 PM

And who is buying GM products? Aside from rental cars and govt purchases the answer is nobody. GM is nothing more that UAW welfare.

angryed on September 18, 2011 at 11:23 PM

And one more thing Bayam, BofA is right leaning?

Contributions by BofA in 2008:

$870,811 to Democrats
$855,055 to Republicans

I know math is tough for your libs, but come on even you should be able to figure out which of those two numbers is higher.

angryed on September 18, 2011 at 11:33 PM

What is it with you and this worship of “experts”? These same experts predicted all would be well with sub prime. They predicted unemployment wouldn’t go above 8% with porkulus. Yet for some unknown reason you continue to worship them.

angryed on September 18, 2011 at 11:20 PM

Because he is a brainless maroon who likes to post silly talking points.

arnold ziffel on September 18, 2011 at 11:34 PM

Thee easy solution to a millionaires tax is to raise the minimum wage to $2000.00/hour. Then everybody will be a millionaire.

J_Crater on September 18, 2011 at 11:41 PM

Yes, highly valued by Wall Street and practically every finance expert in the world

bayam on September 18, 2011 at 9:41 PM

Bwahahaha!

Name Them.

Del Dolemonte on September 18, 2011 at 11:50 PM

Too bad Obama had to save a few million jobs. That has to hurt.

bayam on September 18, 2011 at 10:42 PM

New Grade…G-

Del Dolemonte on September 18, 2011 at 11:52 PM

angryed on September 18, 2011 at 11:20 PM

Because he is a brainless maroon who likes to post silly talking points.

arnold ziffel on September 18, 2011 at 11:34 PM

Wrong Gender

Del Dolemonte on September 18, 2011 at 11:53 PM

Del Dolemonte on September 18, 2011 at 11:50 PM

Paul Krugman, DUH!
I wonder if Bayam knows that Krugie predicted 7 recessions in the 2000s. One every year from 2003 to 2008 and finally he got one right.

angryed on September 18, 2011 at 11:54 PM

The entire premise that his secretary pays a higher % of income in tax is BS. Even if 100% of Buffet’s income were taxed at 15%, a secretary wouldn’t pay that much.

What does a secretary make $50K? $60K?

Even assuming she’s single and has no deductions of any kind, at $50K she pays 14.5% income tax. And this is without a single deduction. No mortgage deduction, no student loans, no child care, no 401k, no IRA, no nothing.

And who out there has no deductions? Almost everyone has some kind of deduction.

So the whole idea of the secretary paying more tax is complete BS. I want to see the tax returns of this secretary he keeps talking about.

angryed on September 18, 2011 at 11:59 PM

Well, he owes what, a billion in back taxes? Maybe that’s what he meant. She did pay more than he did if he didn’t pay his taxes. It makes perfect sense in Lib-speak.

opaobie on September 19, 2011 at 12:22 AM

Won’t Buffet be pleasantly surprised when he finds out the “Buffet Tax” only targets him.

scotash on September 19, 2011 at 1:28 AM

Buffet has over 40 billion… I say we take all but 10 million in which case he will still be in the top 1/10th of one percent in wealth

georgealbert on September 19, 2011 at 7:58 AM

So Zero hopes that these antics (and they are antics) will make him wildly popular with the lunatic left, while everyone else does an eyeroll.

dogsoldier on September 19, 2011 at 9:00 AM

I knew it was the end of civilization. Now a tax on Bermuda Shorts, Hawaiian Shirts and Frozen Drinks…

Mr. Grump on September 19, 2011 at 9:22 AM

My take.

kingsjester on September 19, 2011 at 9:27 AM

Warren Buffett, Walter Winchell’s got you, and your ilk’s number. Walter Winchell. “Money sometimes makes fools of important persons, but it may also make important persons of fools.”

Dr Evil on September 19, 2011 at 9:37 AM

bayam on September 18, 2011 at 6:00 PM

What is it about Obamanites that they believe what others earn should be redistributed to them? Also note that a tax on those making $1 million in a year is NOT really a Buffett Tax. Warren Buffett deals in BILLIONS, not millions. He spends millions to keep from paying taxes. Perhaps he somehow believes if the IRS targets the millionaires, they will lay off billionaires.

Remember, when you approve of them coming for others, someday they will come for you too.

The Buffett Tax is a sure fired way to KILL jobs, the economy, the market and willingness to invest in America. Who among you would agree to take on more risk so that if you win, you can pay more taxes?

katablog.com on September 19, 2011 at 9:49 AM

warren buffett co has not payed it taxes in 10 years

Then there’s that……

Does it really matter what the tax rate is for the wealthy – if they have an army of tax lawyers, and consultants looking for ways, not to have to pay the taxes on their wealth?

Dr Evil on September 19, 2011 at 10:15 AM

Maybe Buffet should pay the taxes he owes right now.

ChuckTX on September 19, 2011 at 10:15 AM

Buffett and Obama Attempt to Cure Economic Woes
ABC News’s Jake Tapper on the administration’s efforts to institute the “Buffett Tax”.

Video from the interview on this topic this morning On Imus In The Morning – after they got the Sarah Palin -Glen Rice gossip out of way.

According to Tapper it’s not going to pass. It’s all about setting the Republicans up as obstructionist, and using it to channel Truman’s “The do nothing congress”

I see a problem with this Buffett strategy, the Democrats control the Presidency, and the Senate….so there’s that :)

Dr Evil on September 19, 2011 at 10:27 AM

This is a millionaire tax, not a billionaire Buffett tax. Too many in Congress fit the millionaire bill and Warren walks on, costing US taxpayers millions as he fights paying his current taxes.

katablog.com on September 19, 2011 at 10:42 AM

The Nazis claimed the Jews were responsible for Germany’s troubles. These days, the Democrats take every opportunity to demonize the rich as if their wealth makes everyone else poor. For statist, authoritarian, collectivists of all species, it’s always “the other” who is responsible for society’s ills. In any case, why is it unfair for Buffet to pay 15% and his secretary to pay 30%? Buffet (if he actually paid his taxes) would fork over, say, $2 million in taxes at 15% while his secretary might pay $15 thousand at 30%. If, under the 14th amendment to the Consitition, we’re all equal citizens, then why are some citizens compelled to foot the bill for others? Is one citizen’s $2 million worth less than another citizen’s $15 thousand? Let’s just have everyone pay a flat rate or better yet, institute a fair tax.

NNtrancer on September 19, 2011 at 12:25 PM

Old n’ Broken: “You’re a RAAAAAAAAAAAACIST!!!

New n’ Sexy!: “You’re RIIIIIIIIIIIIIIICH!!

crazy_legs on September 19, 2011 at 12:29 PM

Buffett knows his years on this earth are sooner rather then later. Like a lot of super rich he begins to feel guilty about all his wealth. Feels the need to get right with the creator. Look at all the left wing causes the Ford Foundation gives to. It’s misguided but they are looking for their salvation as they see it. Wonder if Buffett would want the Government to run his beloved Dairy Queen?

Hummer53 on September 19, 2011 at 1:19 PM

This isn’t new this is the same old same old and Iowahawk even had his article turned into a video “Eat The Rich”

Obama is going to fix the deficit by collecting 3 trillion in taxes from uh who he considers isn’t paying their fair share Like Warren Buffet’s business didn’t pay their taxes for 10 years hence “The Buffet Bill” for the last and GE paid no taxes last year..

Dr Evil on September 19, 2011 at 1:57 PM

Newsflash….Warren Buffet, money, empire & all can get the he$# out of Nebraska & take Ben Nelson with ya! Neither of you buffoons represent the hardworking, honest, ethical values I was raised with in this great state!

huskerdiva on September 19, 2011 at 5:25 PM

Obama wants a Buffett Tax? Dammit, I love eating at Golden Corral. Thanks to that jackinapes the LibTards scammed into the White House, now it’s going to cost more to eat at my favorite chain restaurant!

CatchAll on September 19, 2011 at 9:53 PM

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