President Obama's Tax Plan Will Ask More of Millionaires, call the proposal "Buffett Rule"

[cal04]

http://www.nytimes.com/2011/09/18/us/politics/obama-tax-plan-would-ask-more-of-millionaires.html?_r=2&hp

President Obama on Monday will call for a new minimum tax rate for individuals making more than $1 million a year to ensure that they pay at least the same percentage of their earnings as middle-income taxpayers, according to administration officials.

With a special joint Congressional committee starting work to reach a bipartisan budget deal by late November, the proposal adds a new and populist feature to Mr. Obama’s effort to raise the political pressure on Republicans to agree to higher revenues from the wealthy in return for Democrats’ support of future cuts from Medicare and Medicaid.

Mr. Obama, in a bit of political salesmanship, will call his proposal the “Buffett Rule,” in a reference to Warren E. Buffett, the billionaire investor who has complained repeatedly that the richest Americans generally pay a smaller share of their income in federal taxes than do middle-income workers, because investment gains are taxed at a lower rate than wages.

Mr. Obama will not specify a rate or other details, and it is unclear how much revenue his plan would raise. But his idea of a millionaires’ minimum tax will be prominent in the broad plan for long-term deficit reduction that he will outline at the White House on Monday.

[spartan61]

1. AWWWWWWW...

The repukes will really go for this.:sarcasm:

[FrenchieCat]

10. It doesn't matter if they do.....as that is my understanding at this time....

that folks want to "see" Obama fight, regardless of the outcome...
of course, unless some move the goalposts, which of course, I wouldn't
be surprised if they did. :(

[orpupilofnature57]

2. Rec!!

Buffett is a responsible citizen ,and a responsible Tycoon ,a rare commodity.

[dkf]

3. I am curious what the mechanism will be.

And if he is considering social security taxes in that average.

[unblock]

5. that would be huge! this could be a great back-door way to "raise the social security limit"

this way, you can leave the social security limit directly as is, but then recover the same amount, at least for the million-a-year crowd.

of course there's a gap for the well-off-but-less-than-a-million-a-year crowd, but i'm supposing that over time the buffett rule would apply to everyone -- it should be a basic premise of a progressive tax code that higher income earners always pay more than lower income earners at any point along the scale.

there's also the issue that the "recovered" social security revenue winds up at treasury rather than at the ssa, but a transfer of that amount could easily be made part of the code.


as for the mechanism, i'm struggling to guess a good same-year method. the existing minimum tax scheme doesn't really work for this concept. the only thing i can think of is for the irs to analyze the previous year's actual returns, determine that the average middle class earner pays x% of adjusted gross income, and deem that rate to be the minimum rate for the mega-rich the following year.

[dkf]

6. It beats me why they don't do something to make the AMT work

It's original purpose is exactly to fix what Buffett is talking about.

[unblock]

9. true enough, though by now there are enough loopholes there

the current minimum tax concept, afaik, really only addresses the problem of overuse of deductions (and not even all deductions, at that). so it doesn't address the payroll tax cap, or the lower tax rate for dividends, and so on.

in fact addressing just those two items would probably achieve most of the stated goal.

[LiberalFighter]

4. Every wealthy or nearly wealthy complainer should be asked...

How much of your income is not taxed?????

Possibly also, how much of your income is derived from dividends and capital gains from stocks?

[dkf]

8. And also asked if they are going to keep spending and will keep and not lay off employees.

But I guess we will be happy with the win and will hope for no unintended consequences.

[dkf]

7. In retrospect I doubt it will do much to fix things.

And it makes me worry he is not going to sunset the Bush tax cuts which will do all that we need on the revenue side.

[FrenchieCat]

11. Wow...Poo-pooed so quickly!

Without providing any supporting reason beyond being worried? Come on,
you can do better than that!