The Buffet Rule basically stated is the opinion that a household making more than $1 million each year shouldn’t pay a smaller share of their income in taxes than a middle class family pays. It’s name came from Warren Buffet, a billionaire investor who pointed out the fact that he pays a lower tax rate than his secretary, because most of his income comes from lightly taxed capital gains and dividends.
His thoughts were highly esteemed by some, not so much by others;
“If Warren Buffett and others like him truly feel they’re not paying enough in taxes, they can use the Buffett Rule Act to put their money where their mouth is and voluntarily send in more to pay down the national debt, rather than changing the entire tax code to inflict more job-killing tax hikes on hard-working Americans,”
This statement was made by Steve Scalise, the Louisiana Republican who wrote the bill that passed House inspection this past September. Of course the version that passed does not hold the original intent of the rule whatsoever. This Act is voluntary support only, that is, if anyone feels they have not paid enough taxes, they are free to do so thanks to to this glorious waste of time.
Now that we have that settled.. lets examine all points of view thus far .. and then come to an equally impressive vote on the matter!
1) Proponents of the original version of the Buffet Rule find the current tax system to be lacking morally. They are of the opinion that the tax system is flawed, and that the way to resolve the matter is to create a progressive tax system. This tax is a popular form of state taxation that levies higher tax rates against wealthier individuals, and lower rates on those with lower income.
2)Critics of the Buffet Rule come in two categories.
A – The first is that of agreement. Yes, they say, the current tax system is flawed, however the Buffet Rule would not help the matter, it would only confound it.
They also feel that the Fair Share tax (the Buffet Rule) is good in intention because it targets higher-income people and is adjusted for inflation. But they point out that it is similar to the alternative minimum tax in that it creates “needless complexities and inequities.” To add to this, they point out that the idea of three different sets of tax rules — regular tax, alternative minimum tax and fair share tax – would be overkill. They argue that “one set of rules should apply to everyone, and if we close some loopholes, a reformed tax code could satisfy the goal of the Buffett Rule.”
B – The other criticism of the Buffet Rule is more of a fundamental difference and belief in how the system works.
Critics in this category believe that higher taxes starve the sectors of the economy that create jobs, that a lot of people would stop going to work, or seeking promotions, or working second jobs, or running their businesses. That new businesses would not open under the higher tax rates. They point out that excessive tax rates can lead to economic downturns and costly recession.
What are your thoughts on the current U.S. tax system in light of the recent “Fair Tax” proposal? What kind of system do you prefer in general? Take this poll and let us know!