Research

Cheap Shots

Obama Is Refusing To Have His Buffett Rule Scored Because It’s Not The Money-Saver He Claims

President Obama: “Tax Reform Should Follow The Buffett Rule.  If You Make More Than $1 Million A Year, You Should Not Pay Less Than 30 Percent In Taxes.” (President Barack Obama, Remarks By The President In State Of The Union Address, 1/24/12)

OBAMA DOESN’T WANT TO DISCUSS THE BUFFETT RULE’S IMPACT BECAUSE IT WON’T EVEN “DENT THE DEFICIT OR THE DEBT”

“President Barack Obama Has Left Unanswered A Major Question About His Buffett Rule Tax On Millionaires: Just How Much Money Would It Raise?” “President Barack Obama has left unanswered a major question about his Buffett Rule tax on millionaires: Just how much money would it raise? Administration officials are not releasing projected revenues from the much-hyped plan named after billionaire investor Warren Buffett. During the State of the Union address, Obama tied his proposal — which would tax those earning $1 million at a minimum of 30 percent — to cutting a deficit estimated to top $1.1 trillion for the fourth straight year. But for the moment, the White House wants to keep the attention focused on Obama’s argument that it’s unfair to tax Buffett’s secretary at a higher rate than her boss.” (Josh Boak, “Buffett Rule’s Impact? W.H. Won’t Say,” Politico, 1/26/12)

The Tax Foundation’s Economist David Logan: “It’s An Insignificant Revenue Gain … 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.’”  “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.’” (Josh Boak, “Buffett Rule’s Impact? White House Won’t Say,” Politico, 1/26/12)

  • The Tax Foundation Estimates The Buffett Rule Would Far From “Make A Serious Dent In The National 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.” (Josh Boak, “Buffett Rule’s Impact? White House Won’t Say,” Politico, 1/26/12)

 

The Buffett Rule Is “Unlikely To Have Any Big Impact On Uncle Sam’s Bottom Line.” “Some basic math can tell you that no matter how good progressive taxation might be for the nation’s soul, getting this rule into place is unlikely to have any big impact on Uncle Sam’s bottom line. Daniel Indiviglio, of The Atlantic, did some back-of-the-envelope calculations on this last fall. He found that even if you taxed millionaires at some ridiculous rate, like 100%, you would not come close to closing the budget deficit. The likely impact is much smaller.” (Michael Scherer, “The Numbers And Politics Of Barack Obama’s New Buffett Rule,” Time’s Swampland, 1/25/12)

  • Which Is Why Obama Has Not Actually Proposed The Buffet Rule As Legislation Because It Would Trigger “An Official Budgetary Score.” “Obama is pitching the Buffett Rule as having major savings potential. … But it is notable that President Obama does not plan to ask for the Buffett Rule as legislation, which would trigger an official budgetary score.” (Michael Scherer, “The Numbers And Politics Of Barack Obama’s New Buffett Rule,” Time’s Swampland, 1/25/12)

The Wall Street Journal: “Mr. Obama Could Tax Every Billionaire In America At A 100% Rate And Still Wouldn’t Make A Dent In The Federal Deficit.” (Editorial, “The Buffett Alternative Tax,” The Wall Street Journal, 9/20/2011)

Economists Alice Rivlin And Douglas Holtz-Eakin Told CNN That Obama’s Plan Would “Simply Add A Complication To A Tax Code That Needs More Fundamental Reform.” “The economists, Alice Rivlin, who was director of the White House Office of Management and Budget under President Bill Clinton, and Douglas J. Holtz-Eakin, who led the Congressional Budget Office during George W. Bush’s presidency, said Mr. Obama’s proposal would simply add a complication to a tax code that needs more fundamental reform.” (Brian Knowlton And Jackie Calmes, “Republicans Call Obama’s Tax Plan ‘Class Warfare,’ The New York Times, 9/18/11)

  • Economist Alice Rivlin Said Of The “Buffet Rule” That “The Way To Fix The Tax Code Is To Fix The Tax Code, Not To Add Another Complication At The Margin.” (CNN, “State Of The Union,” 9/18/11)

THE BUFFETT RULE ISN’T A SERIOUS POLICY PROPOSAL, BUT JUST MORE POLITICAL GAMES

The Buffett Rule “Has More Campaign Resonance Than The Big Changes That Would Really Deal With The Nation’s Fiscal Dilemma.” “But it’s an issue that has more campaign resonance than the big changes that would really deal with the nation’s fiscal dilemma, like reforming Medicare and Medicaid. It’s also a value issue for Obama. It is meant to get voters to identify with him, and not the other guy. It’s about “fairness” more than fiscal sanity. And you will be hearing a lot more about it.” (Michael Scherer, “The Numbers And Politics Of Barack Obama’s New Buffett Rule,” Time’s “Swampland,” 1/25/12)

Los Angeles Times: “The Proposed Buffett Rule Is More A Political Statement Than A Deficit-Reduction Tool, Given How Little Money It May Raise.”  “The proposed Buffett rule is more a political statement than a deficit-reduction tool, given how little money it may raise. In that sense, it’s like Obama’s oft-repeated call to eliminate tax breaks for corporate jets. But asking higher-income Americans in general to pay more for the sake of deficit reduction is hardly class warfare; they’ve prospered disproportionately over the past decade, thanks in no small part to federal regulatory and fiscal policies that helped them more than any other segment of society. As a result, they’re in a better position than any other group to help close the budget gap.” (Editorial, “The ‘Buffet Rule,’ And More,” Los Angeles Times, 9/20/11)

Obama Is “Rejecting 35 Years Of Bipartisan Tax Policy.” “Mr. Obama isn’t setting himself apart merely from conservatives with this Buffett ploy. He is rejecting 35 years of bipartisan tax policy that began with the passage of the Steiger Amendment by a Democratic Congress that cut the capital-gains rate to 28% from 35% in 1978.” (Editorial, “The Buffett Ruse,” The Wall Street Journal, 1/26/12)

  •  “This Isn’t Tax Fairness. It’s Tax Folly.” (Editorial, “The Buffett Ruse,” The Wall Street Journal, 1/26/12)

INSTEAD OF PRESENTING ACTUAL PLANS TO REDUCE THE DEFICIT, OBAMA HAS REPEATEDLY RESORTED TO POLITICAL GIMMICKS

President Obama “Has Been All-To-Willing To Avoid Making Tough Decisions.” “One of President Obama’s political weaknesses in his first term has been that he’s all-too-willing to avoid making tough decisions, hesitant to expend political capital for potential long-term gain.  Throughout his first term in office, he’s had a cautious governing style, and has avoided taking on some of his party’s core constituencies.” (Josh Kraushaar, “Obama Trying To Have It Both Ways,” National Journal, 11/30/11)

FY2012 Budget: Obama’s Budget Was “A Political Document By Someone That Wants To Win Re-Election.” “Obama’s $3.7 trillion budget is an opening bid, as well as a political document by someone who wants to win re-election… Bottom line: Presidential budgets are more political documents than anything else, and this budget is by someone who wants to win re-election.” (NBC News’ “ First Read,” 2/14/11)

  • Obama Is Avoiding Social Security Reform Because His Political Team Says The Debate Could Be “Disastrous To His 2012 Reelection Hopes.” “But Obama’s political team, led by David Axelrod, David Plouffe and Jim Messina, are urging the president to understand that backing benefit cuts could prove disastrous to his 2012 reelection hopes, sources say.” (Alexander Bolton, “Social Security Reform Splits White House Political, Economic Teams,” The Hill3/15/11)

Budget Framework: Obama’s Deficit Proposal Sounded More Like A Campaign Speech. “It was billed as President Obama’s big speech on reducing the federal budget deficit. But the Wednesday afternoon address sounded at times like the speech he did not give when he launched his reelection campaign last week.” (Perry Bacon Jr., “Obama’s Budget Speech Has Partisan Tone,” The Washington Post4/13/11)

Super Committee: Obama Avoided Changes To Entitlement Programs In His Supercommittee Proposal In Favor Of A “A Blueprint For Shoring Up His Restless Democratic Base.” “Suffering an erosion of support from the broad coalition that elected him, Obama has crafted a plan that reads more like a blueprint for shoring up his restless Democratic base than a vehicle for reaching across the aisle in search of bipartisan compromise.” (Carrie Budoff Brown and Jennifer Epstein, “Obama To Unveil $3T Deficit Plan,” Politico, 9/18/11)

OBAMA’S COMMITMENT TO TAX FAIRNESS STOPS COLD WHEN IT COMES TO HIS STAFF AND CRONIES

Obama Surrounds Himself With “The Current Loophole-Riddled System’s Prime Offenders.” “As the nation struggles with a stagnant economy, President Barack Obama has preached overhauling the U.S. tax code to spur economic growth. But as he gears up for what looks to be a tough reelection campaign, the president has surrounded himself with the current loophole-riddled system’s prime offenders: corporate executives whose companies have profited off of those loopholes while reaping millions for themselves.” (Zach Carter and Jordan Howard, “Obama’s Close Ties To CEOs Whose Firms Dodge Taxes,” The Huffington Post, 9/1/11)

Obama Appointed GE CEO Jeffery Immelt To Head His Jobs Council Despite GE Paying No Corporate Taxes In 2010 And Shedding One-Fifth Of Its U.S. Workforce Since 2002. “This January, when Obama at long last created a jobs council, he appointed Jeffrey Immelt, CEO of G.E., to lead it. The Times did the due diligence the White House didn’t and found that G.E. paid essentially no U.S. taxes on $14.2 billion of profit, even as it has shed one fifth of its American workforce since 2002.” (Frank Rich, “Obama’s Original Sin,” New York Magazine, 7/3/11)

  • “GE’s Success At Avoiding Taxes Is Nothing Short Of Extraordinary.” “For those unaccustomed to the loopholes and shelters of the corporate tax code, GE’s success at avoiding taxes is nothing short of extraordinary. The company, led by Immelt, earned $14.2 billion in profits in 2010, but it paid not a penny in taxes because the bulk of those profits, some $9 billion, were offshore. In fact, GE got a $3.2 billion tax benefit.” (Jake Tapper, “GE Paid Not Federal Taxes In 2010,” ABC News, 3/25/11)
  • “2010 Was The Second Year In A Row That GE Recorded Billions In Profits And Paid No Taxes.” (Jake Tapper, “GE Paid Not Federal Taxes In 2010,” ABC News, 3/25/11)

“36 Of President Obama’s Executive Office Staff Owe The Country $833,970 In Back Taxes.” “As President Obama has called for all Americans to pay their fair share in taxes, Investor’s Business Daily reports that the White House staff owes a pretty hefty amount of back taxes to Uncle Sam: A new report just out from the Internal Revenue Service reveals that 36 of President Obama’s executive office staff owe the country $833,970 in back taxes. These people working for Mr. Fair Share apparently haven’t paid any share, let alone their fair share.” (Byron Tau, “White House Staffers Owe More Than $800,000 In Back Taxes,” Politico, 1/26/12)

Warren Buffett’s Berkshire Hathaway Owes Ten Years In Back Taxes. “Berkshire Hathaway, the eighth-largest public company in the world according to Forbes, openly admits to still owing taxes for years 2002 through 2004 and 2005 through 2009, according to the New York Post. The company says it expects to ‘resolve all adjustments proposed by the US Internal Revenue Service ‘within the next year.’” (“Warren Buffett’s Berkshire Hathaway Owes Taxes Going Back To 2002,” The Huffington Post, 8/29/11)