The “Buffett rule” is dead for the moment, having failed to muster enough votes in the Senate. If we’re lucky, it will stay dead, too.
Don’t get us wrong. We agree the rich should pay higher taxes than the average working stiff. For the most part, in fact, they do. Even so, raising taxes on the rich will no doubt have to be part of any overall answer to America’s colossal federal deficit.
But the Buffett rule — which would mandate that anyone making more than $1 million a year pay a tax rate of at least 30 percent — is fiscal reform stuffed with empty calories. It may taste good to Americans with a populist bent, but it contains little nutrition, and could induce unhealthy side effects, too.
For tax reform to be meaningful in terms of deficit relief, lots of Americans — not just the very wealthy — will have to pay somewhat more. The math is inescapable, no matter what most politicians usually imply.
That being the case, it makes little sense to nibble at the tax code by way of a single adjustment promoted by the president mostly to score political points. Had the Buffett rule been enacted, it would have collected, according to two widely quoted estimates, only $31 billion or $47 billion over the next 10 or 11 years.
A better way to boost taxes on the wealthy is to eliminate some of the loopholes and deductions they exploit — in other words, to simplify the tax code.
Americans need to be told the truth: that if we’re serious about growing federal debt, we’ve got to have entitlement reform that reduces benefits and tax reform that raises more revenue — even from many in the middle class.
The Denver Post (April 19)