Buffett Rule would bring in less than $3 billion a year in revenue

posted at 2:30 pm on March 20, 2012 by Ed Morrissey

Barack Obama has spent the last seven months demanding a surtax for the wealthy as a needed revenue resource to balance the federal budget and restore “fairness” to the tax system.  In making that case, Obama has often used the anecdote provided to him by multibillionaire Warren Buffett and how his secretary pays a lower tax rate than he does — although Obama rarely explains that the difference comes from lower tax rates on risk-related income rather than salary, which rewards and encourages further risk-taking and boosts the economy.  Now the Joint Committee on Taxation has scored Obama’s Buffett Rule, put forth by Senator Sheldon Whitehouse (D-RI), and concludes that it would increase revenues by less than three billion dollars a year:

A bill designed to enact President Barack Obama’s plan for a “Buffett rule” tax on people earning more than $1 million a year would rake in just $31 billion over the next 11 years, according to an estimate by Congress’ official tax analysts obtained by The Associated Press. That would be a drop in the bucket of the over $7 trillion in federal budget deficits projected during that period.

The figure is also miniscule compared to the many hundreds of billions the government earns from the alternative minimum tax, which Obama’s budget last month said he would replace with the Buffett rule tax.

The alternative minimum tax, originally aimed at ensuring that wealthy Americans pay taxes despite deductions and other breaks, has begun affecting upper middle-class families, and Congress acts every year to minimize its impact.

In an analysis provided to The AP on Tuesday, Congress’ Joint Committee on Taxation estimated that a bill introduced last month by Sen. Sheldon Whitehouse, D-R.I., enshrining Obama’s proposal into law would collect $31 billion over the coming 11 years.

Just to put this in perspective, here are Obama’s budget-projection deficits for the next four years, from the CBO using Obama’s rose-colored glasses economic scenarios:

  • FY 2012 (current year) – $1.3 trillion
  • FY 2013 – $977 billion
  • FY 2014 – $702 billion
  • FY 2015 – $539 billion
  • FY 2016 – $529 billion

That $3 billion per year amounts to:

  • 0.23% of the FY2012 deficit
  • 0.31% of the FY2013 deficit
  • 0.43% of the FY2014 deficit
  • 0.56% of the FY2015 deficit
  • 0.57% of the FY2016 deficit

In other words, despite spending nearly eight months pushing this as one of the main solutions for the deficit crisis, Obama’s policy wouldn’t even touch 99.43% of the problem in any year of a second term.  It does, however, leave him 99.43% pure as a class warrior.


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How’s the Media’s Math?

KOOLAID2 on March 20, 2012 at 2:33 PM

Warren Buffett sucks.

Apologetic California on March 20, 2012 at 2:33 PM

Buffett Rule would bring in less than $3 billion a year in revenue

Maybe if Buffett paid his taxes….revenue would increase.

Electrongod on March 20, 2012 at 2:34 PM

Math is Hard!

KOOLAID2 on March 20, 2012 at 2:34 PM

Will Senator Sheldon be punished br JugEars juveniles?

KOOLAID2 on March 20, 2012 at 2:36 PM

Buffett Rule!!

Sandra Fluke!!

War on Women!!

Look, a squirrel!!

Khun Joe on March 20, 2012 at 2:36 PM

Yea, but a$$clown thinks it works on the campaign trail. So, you know, that’s all Odoodoo’s got.

msupertas on March 20, 2012 at 2:37 PM

Nothing this Administration does is sound policy geared toward rejuvenation and reform, but rather myopic demagoguery focused on the reelection of Obama.

And the sad thing is — it works.

youknowit on March 20, 2012 at 2:37 PM

It is not about increasing revenue. It is about giving The Won the opportunity to sneer about “forcing rich people to pay their fair share” (accompanied by that slightly insane giggle of his).

The Won would not care if the Buffett Rule actually decreased revenue, as long as it gave him a chance to demagogue the issue.

HeatSeeker2011 on March 20, 2012 at 2:37 PM

Pinocchiobama.

fogw on March 20, 2012 at 2:38 PM

In other words, despite spending nearly eight months pushing this as one of the main solutions for the deficit crisis, Obama’s policy wouldn’t even touch 99.43% of the problem in any year of a second term. It does, however, leave him 99.43% pure as a class warrior.

And that’s really the goal here. Keeps him in OWS’ “99%” Club.

Bitter Clinger on March 20, 2012 at 2:38 PM

Spot on khun

cmsinaz on March 20, 2012 at 2:38 PM

It does, however, leave him 99.43% pure as a class warrior.

And 100% something else that can’t be mentioned in polite company.

Happy Nomad on March 20, 2012 at 2:39 PM

…Coverup Media to refer to “Buffett Rule” as “Buffett B S!”…from now until November!/

KOOLAID2 on March 20, 2012 at 2:39 PM

So the Dem counter to Paul Ryan will count on $3B in new taxes on the the evil rich and what? Zeroing out the defense budget?

WashJeff on March 20, 2012 at 2:41 PM

Me likey fogw

cmsinaz on March 20, 2012 at 2:41 PM

Well I guess the secretary will make up for what buffett doesn’t pay? Pay your taxes buffett, stat!
L

letget on March 20, 2012 at 2:41 PM

In making that case, Obama has often used the anecdote provided to him by multibillionaire Warren Buffett and how his secretary pays a lower tax rate than he does

Isn’t the case they’re trying to make that the secretary pays a higher rate than Buffet?

Kelligan on March 20, 2012 at 2:42 PM

Maybe if Buffett paid his taxes….revenue would increase.

Electrongod on March 20, 2012 at 2:34 PM

It was funny how Buffet became an instant Lefty celeb after his “please tax me!” claptrap. Then it was revealed that his companies are not paying their taxes. Suddenly the Lefties stopped talking about him as much.

visions on March 20, 2012 at 2:43 PM

Warren Buffett sucks.

Apologetic California on March 20, 2012 at 2:33 PM

No, he’s savvy.

He’s posed as a class warrior and has been paid royally by the Regime. Did you notice his quick turnaround on his underwater BOA stock? That wasn’t an accident…

Buffet’s a businessman and is very happy to engage in crony capitalism. He’s rather good at it.

CorporatePiggy on March 20, 2012 at 2:43 PM

Clinton, on taking office in 1993, promised that the Federal government could give everything to everybody by increasing taxes only on millionaires.

When the budget was published, it turned out that making $50,000 a year made you a ‘millionaire’.

That’s the problem that Democrats refuse to admit. In the US, wealth is broadly distributed. To get any real revenue from increased taxes, you have to reach very far down into the working population. Anything else is a lie. Lately, liberals/progressives/Democrats/etc. have been lying a lot.

Bartrams Garden on March 20, 2012 at 2:45 PM

The ecomony…?

… Never heard of it.

Seven Percent Solution on March 20, 2012 at 2:46 PM

Put the trash that is today’s Democrat Party to the test.

Just go ahead and do it…in exchange for the rest of the Ryan Plan. Call our Pu$$y in Chief’s bluff.

MNHawk on March 20, 2012 at 2:47 PM

It’s not about the revenue, it’s about the principle. – Obama, 2008 Debates (on raising capital gains tax, even though it’d bring in less tax revenue).

lorien1973 on March 20, 2012 at 2:47 PM

Which is not even enough to pay the federal debt for one day.

rogerb on March 20, 2012 at 2:47 PM

That’s because BHO has no understanding of the difference between income and wealth. And, once he figures that out and proposes his new strategy to tax wealth… let’s see how many of these knuckleheads step up to back him…

Neo-con Artist on March 20, 2012 at 2:49 PM

This isn’t going to make any difference about to liberals. It’s not about revenue to them. It’s about their hatred of the wealthy and their desire to impose their idea of fairness. If this study concluded that the Buffett rule would reduce revenue they would still want to impose it.

Mark1971 on March 20, 2012 at 2:51 PM

It is not about increasing revenue. It is about giving The Won the opportunity to sneer about “forcing rich people to pay their fair share” (accompanied by that slightly insane giggle of his).

The Won would not care if the Buffett Rule actually decreased revenue, as long as it gave him a chance to demagogue the issue.

HeatSeeker2011 on March 20, 2012 at 2:37 PM

Exactly. It’s not about any perceived “results” – It’s about the continuation of class warfare. It’s about pointing fingers at the enemies of the State. It’s about “wreckers” of the Utopian economy. It’s about making Kulaks, out of Americans.

It’s about Bolshevism – Obamuh style.

OhEssYouCowboys on March 20, 2012 at 2:52 PM

Buffett Rule would bring in less than $3 billion a year in revenue

Just enough to offset the Obama Family vacation expenses to the taxpayers.

portlandon on March 20, 2012 at 2:52 PM

It’s not about the revenue, it’s about the principle. – Obama, 2008 Debates (on raising capital gains tax, even though it’d bring in less tax revenue).

lorien1973 on March 20, 2012 at 2:47 PM

THIS!!

Obama told Charlie Gibson in ’08 that “fairness” is more important than raising revenues.

Bitter Clinger on March 20, 2012 at 2:52 PM

Barack Obama has spent the last seven months demanding a surtax for the wealthy as a needed revenue resource to balance the federal budget

This has been the Democrats’ Budget Game Plan:

Democrats on Paul Ryan’s Budget: “THE SKY IS FALLING! HE WANTS OLD PEOPLE TO DIE QUICKLY AFTER EATING CAT FOOD!”

Democrats on Obama’s Last Budget: ” WE’RE JOINING REPUBLICANS AND SHOOTING THIS SUCKA DOWN IN FLAMES!”

Harry Reid on a Senate Budget: “(YES, IT HAS BEEN 1,056 DAYS SINCE WE PASSED A BUDGET) NO, I DON’T PLAN TO BRING A BUDGET TO THE FLOOR THIS YEAR!”

Obama on his Budget: “MY ‘A NEW ERA OF RESPONSIBILITY: RENEWING AMERICA’S PROMISE’ BUDGET ONLY JACKS UP FEDERAL SPENDING BY A STUNNING 18% — A RATE OF INCREASE ‘NEARLY 3 TIMES THE AVERAGE GROWTH RATE OF FEDERAL OUTLAYS OVER THE PREVIOUS 10 YEARS,’ ACCORDING TO THE CBO, BUT IT IS TOTALLY RESPONSIBLE. I SWEAR. WOULD I LIE TO YOU?”

Trolls: Until you boys get serious and grow some ‘nads, just STFU, already.

Resist We Much on March 20, 2012 at 2:55 PM

Buffett Rule would bring in less than $3 billion a year in revenue

$3 billion?!?!?!?! That’s all?

Heck, that barely covers the cost of vacations for him and his wife and kids.

UltimateBob on March 20, 2012 at 2:55 PM

I believe the expression we’re all looking for is: duh!

totherightofthem on March 20, 2012 at 2:56 PM

White House learns hard lesson:

Leveling the playing field has no effect on the game.

{Mostly because life isn’t a game, and economics is all about math)

BobMbx on March 20, 2012 at 2:58 PM

Alrighty, guess we can increase the budget by another $3 billion!

Ukiah on March 20, 2012 at 3:00 PM

Democrats took majority control at the start of the 110th Congress on January 3, 2007.

On that day (1/3/2007), according to the U.S. Treasury, the total national debt was $8,677,214,255,313.07

As of last Friday (3/16/2012), according to the U.S. Treasury, the total national debt was $15,566,570,829,745.94

Democrats have raised the total national debt by $6,889,356,574,432.87 (almost $6.9 Trillion) in just over 5 years. Democrats have added an average of over $111 Billion in new debt each and every month for over five years!

Democrats have raised the total national debt by 79.4% (almost 80%) in just over 5 years.

It’s time for a CHANGE.

ITguy on March 20, 2012 at 3:00 PM

yet the GOP candidates’ tax plans ADD to the deficit

so really you guys have no room to talk

DBear on March 20, 2012 at 3:01 PM

Buffett Rule would bring in less than $3 billion a year in revenue

Obama deficit spends $4,261,553,856.29 per day alone.

Resist We Much on March 20, 2012 at 3:02 PM

Isn’t there an expression identifying the problems with:

Lies,
Damn lies, and
Liberals with statistics?

It only goes too prove that common sense can’t be taught!

EdmundBurke247 on March 20, 2012 at 3:03 PM

Us – We see successful people and imagine that one day I too could be like that.

Them – They see successful people and say, one day I’ll get that bastard.

jb34461 on March 20, 2012 at 3:05 PM

Democrats have added an average of over $111 Billion in new debt each and every month for the last 62 straight months.

And they think that this tax, which even if it works as planned (which almost never happens… revenues almost always fall short of projections), would only raise an average of $0.235 Billion (only $235 million) per month, is somehow supposed to balance out their $111 Billion in deficit spending each month?

Show me a college transcript that shows Obama passing a math class!

ITguy on March 20, 2012 at 3:05 PM

Alrighty, guess we can increase the budget by another $3 billion! Trillion!

Ukiah on March 20, 2012 at 3:00 PM

Fixed. Remember, this is 0bama math we’re using here. Things get multiplied by several orders of magnitude just to make him look good.

UltimateBob on March 20, 2012 at 3:07 PM

Alrighty, guess we can increase the budget by another $3 billion!

Ukiah on March 20, 2012 at 3:00 PM

That would be ~$4.5B. You need to factor in the real/borrowed dollar ratio of ~40-45%.

BobMbx on March 20, 2012 at 3:08 PM

Don’t we borrow $4 million a day!

Love Democrat math…esh

CoffeeLover on March 20, 2012 at 3:10 PM

oops make that $4 Billion a day….

sorry

CoffeeLover on March 20, 2012 at 3:12 PM

Actually, $4Billion the first year if the slob Buffett would pay his own damn taxes.

slickwillie2001 on March 20, 2012 at 3:15 PM

yet the GOP candidates’ tax plans ADD to the deficit
 
so really you guys have no room to talk
 
DBear on March 20, 2012 at 3:01 PM

 
Wrong thread. This one is about the Buffett/secretary tax that was so important that it merited a spot in the State of the Union address in January.
 
The Obama debt thread is here. Please keep up.

rogerb on March 20, 2012 at 3:17 PM

Hey, three billion is nothing to sneeze at: sure it would slow job-producers down, but that kind of revenue would cover federal expenses for about… half a day.

Tzetzes on March 20, 2012 at 3:20 PM

Alrighty, guess we can increase the budget by another $3 billion!

Ukiah on March 20, 2012 at 3:00 PM

Exactly!

Tzetzes on March 20, 2012 at 3:21 PM

You all just do not understand “government logic”. If Obama and the democrats could promise to bring in 3 billion more a year by raising taxes, Obama and the democrats and some republicans could justify raising spending 100 billion a year. (Whether or not the 3 billion in new taxes actually came in is not the question. Spend Spend Spend..)

You all just do not understand “government logic”.

DVPTexFla on March 20, 2012 at 3:25 PM

Rather than compare the new revenues to budget deficits, I would like to see a comparison to all the new spending and programs Obama proposed…all paid for by a “tax increase on the rich”.

Every time I turn around he’s proposing some new program, paid for by that same tax increase.

jeanneb on March 20, 2012 at 3:29 PM

anecdote provided to him by multibillionaire Warren Buffett and how his secretary pays a lower tax rate than he does

Sorry, it’s a nit, but I thought Buffett pays a lower rate than the secretary.

Still it’s cynical spin. Buffett is a tool of Obooba.

freedomfirst on March 20, 2012 at 3:33 PM

Which is not even enough to pay the federal debt for one day.

rogerb on March 20, 2012 at 2:47 PM

Forget the debt! The govt spends $10B a day! If you add what the govt already takes in, this doesn’t even pay for January 1. Then what?

txhsmom on March 20, 2012 at 3:35 PM

Warren Buffet (and his ilk) are the best allocators of capital on the planet. They know where to put $$ where it’ll have the most economic benefit.

BHO (and his ilk) are the worst allocators of capital on the planet.

How does it make economic sense to take money from the best capital allocators and give it the worst capital allocators?

Deafdog on March 20, 2012 at 3:37 PM

DBear on March 20, 2012 at 3:01 PM

Well, little one. I guess we’ve found someone that believes you can close a $1.6 trillion deficit with $3 billion in tax increases. The only question remaining is figuring out if you’re even smart enough to be useful?

MNHawk on March 20, 2012 at 3:39 PM

The UK’s 50% tax rate on highest earners was predicted to bring in several billion pounds more. In actual fact, revenues fell by £500 million.

Static tax analysis just doesn’t work.

Jay Mac on March 20, 2012 at 3:47 PM

You’ll have to pardon Barry. He sucks at math.

Ain’t REALITY a bitch?

GarandFan on March 20, 2012 at 3:47 PM

Its incrementalism. After we get the rich paying their fair share, then the rest of us will be expected to make sacrifices so we can pay our fair share as well.

paulsur on March 20, 2012 at 3:48 PM

If it’s $3.1B over 11 years that’s $2.8B year

At a burn rate of $6.85M per minute (http://bit.ly/GEV21P) that’s less than an 8 hour shift of government overhead.

digitalintrigue on March 20, 2012 at 4:07 PM

They can raise taxes to 120% on everyone and we’d still be in deficit.

There are two options: CUT SPENDING or GROW THE ECONOMY so that the budget is in balance.

Obama can’t do either.

wildcat72 on March 20, 2012 at 4:14 PM

And nobody ever talks about the other side of the equation – what is lost from the economy because of that $3B being sucked out? That’s $3B less (real) investment in companies, less payroll, less money available for loans, less spending…..

dentarthurdent on March 20, 2012 at 4:19 PM

Jay Mac on March 20, 2012 at 3:47 PM

BINGO!!!!

dentarthurdent on March 20, 2012 at 4:22 PM

And nobody ever talks about the other side of the equation – what is lost from the economy because of that $3B being sucked out? That’s $3B less (real) investment in companies, less payroll, less money available for loans, less spending…..

dentarthurdent on March 20, 2012 at 4:19 PM

I was just about to say that. Lets discourage investing that’ll fix the economy

steel guy on March 20, 2012 at 4:35 PM

Over Christmas break I had to straighten out my son’s faulty logic thanks to the liberal professors he’s learning from at college. He mentioned how his roommate’s parents are kind of rich, but they “don’t do anything with their money” – they live in a modest house, drive old cars, etc. I asked him where their money is – he says “it’s mostly invested in the company they own”. Duhhh – that means their money is being used to grow the company, pay for materials/products, pay facilities costs, and pay people. If they have money in savings, that’s being used to give people car loans, mortgages, signature loans, etc. If they spend money, they are buying products or services that other people provide – which keeps them employed. There’s no such thing as “not doing anything with their money”. One way or another rich peoples’ money is being used somehow to pay for something. That’s where the libs completely lose sight of the real world.

dentarthurdent on March 20, 2012 at 5:05 PM

Old saying we should hammer over and over; we don’t need higher tax rates, we need more tax payers.

There are 2.6 million fewer people paying taxes since the start of this administration, with nearly 50% paying no federal taxes. No tax rate is sustainable without enough individuals working to provide a tax base.

Jobs, jobs, jobs.

But a reasonable tax rate

must

go hand in hand with a substantial working population.

itsspideyman on March 20, 2012 at 5:30 PM

Sorry, stupid posting……

itsspideyman on March 20, 2012 at 5:31 PM

It does, however, leave him 99.43% pure as a class warrior.

I would say he lives in an ivory tower… but Ivory soap is 99 44/100% pure.

malclave on March 20, 2012 at 7:21 PM