Washington has repeated nearly every economic policy mistake of the 1930s in recent years, so why not repeat one of the bigger blunders of the 1960s too? We refer to President Obama's proposal yesterday for a new "Buffett Rule" to raise taxes on Americans earning more than $1 million a year. This may sound familiar to readers of a certain age, because it is how the current, and much-hated, Alternative Minimum Tax was born.
...the Minimum Tax of 1969 that later became the Alternative Minimum Tax. The AMT now hits some four million taxpayers, and 27% of households that paid it in 2008 had adjusted gross income of $200,000 or less.
Because it hits taxpayers with heavy deductions, the AMT wallops in particular the upper-middle-class suburbs in high-tax states like New Jersey, Connecticut, Illinois and California.
There's one small problem: The entire Buffett Rule premise is false...
And what about the economy? Well, the plan Mr. Obama unveiled yesterday along with his Buffett Rule would sock the economy with $1.5 trillion in new taxes over 10 years, or about 1% of GDP. This includes the tax increases built into the 2013 expiration of the Bush-era tax rates but not those of ObamaCare. Anyone who believes this will help an economy that is creating few new jobs and growing by only 1% probably also believes that only the rich would pay the Buffett Alternative Tax.
◼ President Obama took to the Rose Garden podium on Monday to unveil the latest in his series of misleading and unpopular plans to fix the stalled economy. Now he wants another $1.5 trillion in government coffers from higher taxes, and he's waging class warfare to get it. - Emily Miller/Washington Times
The new "Buffett Rule" concept is named in honor of billionaire investor Warren Buffett, who says he pays a lower tax rate than his secretary.,,, But it's not so: Mr. Buffett is doubly taxed. He paid the highest tax rate of 35 percent on his income. In turn, he invested that money, taking the associated risk, and paid a capital-gains tax on any earnings. His secretary, who Mr. Buffett pays $60,000 a year, is taxed at a lower rate on just her income. The size of Mr. Buffett's deductions is no excuse to raise rates on everyone else's capital.
