Good news: Obama's dumb "Buffett Rule" budget gimmick would reduce the deficit by around ... four percent

What’s the saddest part of this? That The One is so desperate to demagogue Romney and the GOP as the party of the rich that he’d make a chump-change gambit like this the centerpiece of his budget agenda? Or that liberals are pretending to be impressed? Good lord, I hope they’re pretending.

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The liberal outfit Citizens for Tax Justice expects $50 billion in new revenue from the Buffett Rule in year one. Other estimates peg the total take even lower. Remember, the feds spend north of $10 billion each day.

Republican lawmakers — noting the absence of real numbers — attacked the plan as a political charade, an attempt to score points in the November election instead of a serious policy to reduce federal debt. One outside analysis by the non-partisan Tax Foundation indicates the rule would generate another $36.7 billion a year in revenue — far from enough to make a serious dent in a national debt of $15 trillion.

“It’s a smokescreen,” Rep. Steve Scalise (R-La.) told POLITICO. “Barack Obama just wants to pit one group against another so he can raise more money to spend on a bloated government.”…

On average, someone hauling in $1 million a year might have fork over another $50,000 to Uncle Sam. That’s a sizable tab for individuals but not a lot for the government, said David Logan, an economist at the Tax Foundation, a Washington, D.C. think tank.

“It’s an insignificant revenue gain,” he said. “I view it more as a political tool than anything else, because it doesn’t raise enough revenue to dent the deficit or the debt.”

Curiously enough, the White House has been in no rush to release its own inevitably disappointing projection. $36.7 billion would reduce the projected deficit for 2012 by a tidy 3.8 percent — essentially a rounding error — but lefty Greg Sargent’s excitement is palpable at the thought of Democrats forcing a high-profile floor vote in the Senate on the Buffett Rule to make Republicans squirm. The response to this will be, “Well, $50 billion’s better than nothing,” but that’s actually not true. It’s less healthy for the country to waste time on gimmicks like this, which sustain the fantasy of low-information voters that tax hikes on the rich can close the hole in the budget, than it would be for Obama to offer nothing and let the sense of crisis grow until Congress feels public pressure to act on mandatory spending. That’s the only real fix, of course, but reforming Medicare doesn’t get Obama any closer to his real goal of winning re-election whereas the “Buffett Rule,” a.k.a. the Romney Rule, does, so we’re going to jerk around with this red herring for months and months and months to come. Those priorities deserve a second term, no?

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Here’s Reason editor Matt Welch with a better idea for how to make Warren Buffett a featured player in this debate.

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Stephen Moore 8:30 AM | December 15, 2024
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