The curious timing of the Buffett Rule

If the deficit crisis counts as such a dire emergency that even a reduction of one-half of 1 percent merits this ferocious tax fight, then why did the president ignore a similarly desperate situation in 2009, 2010, and 2011? Of course, he would say that he addressed the problem previously by calling for an end to Bush-era “tax cuts for the rich” but those changes—which Obama ultimately abandoned—would have delivered an estimated $70 billion in added revenue per year. That’s still barely 5 percent of the deficit (in the most optimistic projections) but it’s 14 times more than the anticipated haul from the Buffett Rule…

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And the risks count as far more serious than any possible reward, since the proposed change would double (from 15 percent to 30 percent) the rate of investment tax for many of the nation’s most significant investors. If you counted yourself among the lucky few who earned more than a million a year from your portfolio, and if you knew that starting on Jan. 1, 2013, you would pay twice as much in taxes on capital-gains income than you would today, wouldn’t you feel impelled to sell off significant assets in the low-rate months remaining to you? The impact on the stock market of the resultant tidal wave of sell orders would bring a sharp, painful reverse if not an outright crash, damaging middle-class investors and pensioners at least as much as Wall Street biggies.

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