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.