The Buffett Rule
The Senate is getting set to vote on the “Buffett Rule” which would require anyone making over a $1 Million a year to pay a minimum 30% income tax regardless of what deductions or write offs they may be eligible for. I’m not going to mention that Obama was caught admitting that this is nothing more than a political ploy, or that the very person it was named after already owes more than $1 Billion in back taxes even without this stupid rule. What I’m going to do instead is illustrate how this absurd game of class warfare will ultimately get played out should this rule ever see the light of day.
Let’s start with the obvious. Yes, people will find a way around this rule just like they do all the others. So in reality this is nothing more than a feel good rule, not a legitimate fix for anything. The Treasury Departments own estimates are that it will only generate a mere $5 Billion in extra revenues at best. That’s because in spite of what you hear, the average person this rule would affect is already paying 26% net on their income as it is. For the super rich it’s a simple matter of either deferring excess compensation off to future years, or taking their wealth off-shore. We hear Liberals whining about the idea of Romney having bank accounts in theCayman Islands. Can you say, “Well DUH!”? Why put yourself in a situation where you have to pay excessive taxes needlessly? If he is in fact doing what they are accusing him of, I would call it smart business acumen.
In the long run there is a much more sinister affect to the Buffett rule. While the Left foolishly thinks it’s harming the rich, in reality it will do far more damage to the poor. I’m a small business owner and like most small business owners the profits I make don’t go directly back into my pocket nearly as much as I’d like. Instead they go back into my company so that I can both take care of my employees and hopefully invest for future growth. So that $1 Million you are so jealously drooling over isn’t even real, it’s just numbers on a piece of paper. Ultimately the smaller those numbers are, the fewer jobs I’ll be able to produce and maintain.
The second negative affect that it will have will be to charities. Those people that are being directly targeted are often some of the bigger charitable donors around. The reason is that given a choice between turning over the excess to Uncle Sam as taxes, or to a charity of their choice and taking the write off, most prefer to see that money putting to good use through charity. If Uncle Sam takes away that choice, it is the charities that lose out.
The Left will try to say that they will at least be getting the rich to pay their fair share. That is until the next time the Left needs a demon to blame for their failures. Simple logic states that you can’t create jobs by taking money away from the very people needed to create those jobs. After all, no country in the entire history of mankind has ever taxed its way to prosperity. In my book “Common Sense – A View from the Heartland” I describe how liberalism is nothing more than one-step-forward thinking. The Buffett Rule is a perfect illustration of how this type of thinking might make you feel good today, but will always come back to bite you in the end.