Taxes: Obama’s adjusted gross for 2011 doesn’t meet criteria for Buffett Rule
posted at 1:26 pm on April 13, 2012 by Howard Portnoy
“I do not want, and I will not accept, a deal in which I am asked to do nothing,” the president told an audience last July, adding:
I’m able to keep hundreds of thousands of dollars in additional income that I don’t need, while a parent out there who is struggling to figure out how to send their [sic] kid to college suddenly finds that they’ve got a couple thousand dollars less in grants or student loans.
His solution to this “problem of income inequity,” as all the world now knows, is the Buffett Rule, which mandates that rich dudes like the president and billionaire Warren Buffett (whose misleading claim inspired the rule) pay out 30% of their earned and unearned income in the form of taxes. It is raising the tax rate on unearned income, which derives from capital gains and dividends on investments, that makes the Buffett Rule so pernicious.
Although increasing capital gains taxes is an ill-advised maneuver when the economy is in a fragile state, as Obama himself acknowledged in 2009, it always carries a risk. Historically, this action has had a paradoxical effect, resulting in a decrease in net revenue to the government.
Mindful of this, the conservative PAC American Crossroads created a petition on its Facebook page encouraging the president and Buffett to ease their consciences by voluntarily paying more taxes. When asked about the petition on Air Force One on Tuesday, White House spokesman Jay Carney dismissed it as a gimmick. He went so far as to chide the reporter who had asked the impertinent question:
You guys are seriously buying into this gimmick? And what the president has made clear that he does not believe that people like him who’ve been fortunate enough to succeed financially should pay taxes at a lower rate than middle-class Americans. He believes that we should ask people like him to pay a little bit more, people like Warren Buffett and others, millionaires and billionaires who have succeeded, to pay a little bit more.
As it turns out, however, the president did not earn enough this year to be affected by the Buffett Rule. Obama’s blog at Whitehouse.gov released his tax return for 2011. His reported adjusted gross income was $789,674. He paid $162,074 in taxes, which means his effective federal income tax rate was 20.5%. His net income was way short of the $1 million cutoff, which requires someone with “additional income” that he doesn’t need to pay federal tax at a 30% rate.
Naturally, there is nothing stopping the president from visiting the website TreasuryDirect, which allows anyone to donate to the U.S. Treasury, and making up the difference. Nothing, that is, beyond his press secretary’s having written off the idea as a “gimmick.”
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