President Obama to make his case for the 'Buffet Rule'
Law would require multi-billionaires to pay more than their secretaries in taxes
U.S. President Barack Obama will be making his case for the "Buffet Rule," arguing that it would make the tax code more fair, making it more difficult for the very rich to lower their tax bills. Obama will deliver a speech addressing the matter in a speech this coming Tuesday in Florida.
U.S. President Barack Obama will deliver a speech addressing the Buffet Rule in a speech this coming Tuesday in Florida.
According to Obama, there should be a threshold of at least 30 percent of their income.
Most millionaires currently already pay a higher percentage of their income in federal taxes than the vast majority of all Americans. According to the Congressional Research Service, roughly 25 percent of them end up with a lower effective tax rate than 10 percent of middle-income households.
A very small number or an estimated 1,470 households in 2009, according to the IRS end up owing no federal income tax at all.
Obama's Buffett Rule directly addresses these high-income households that are in a position to structure their income and engage in legal tax strategies to minimize their tax bite.
"The idea behind the Buffett Rule is to have a tax on high-income earners who manage to avoid paying a large share of their income in taxes," Director of the president's Council of Economic Advisers Alan Krueger told journalists.
The very rich can do so if much of their income comes from capital gains and dividends, which are taxed at a lower rate than ordinary paychecks. The same is true if they have made tax-free or tax-sheltered investments.
A number of other tax breaks on the books end up disproportionately benefiting high-income households.
Krueger insists that the Buffett Rule would also make for good tax policy by making the tax code more efficient. Under the rule, there would be less incentive for the wealthy to choose one investment or financial activity over another or to reduce their income simply to reduce their tax bills.
Tax experts say the goals of the Buffett Rule could be accomplished more simply through a complete overhaul of the tax code.
Obama initially proposed the Buffett Rule as a guiding principle for reform. Senate Democrats are now pushing a bill to implement a version of the rule in today's tax code. And the White House is now endorsing that push.
Politically during this election year, while the Buffett Rule might not be a homerun with independents and swing voters, it's pretty clear why the Obama campaign is embracing it: You can personalize it against Romney.
Romney's "Swiss bank account" coupled with his unwillingness to release any tax returns before 2010 as much as it did the Buffett Rule. The campaign is releasing a statement saying that Romney should stop playing "hide and go seek" with his tax returns.
"Mitt Romney opposes the Buffett Rule - he thinks millionaires and billionaires should keep paying lower tax rates than middle-class families. In fact, Romney himself isn't paying his fair share - in 2010, Romney paid a tax rate of only 13.9 percent, well below the rate paid by many middle-class Americans.
"And with each week, new questions are raised about whether Romney took unusual steps to avoid paying his fair share in taxes. Yet we can't answer those questions because he simply refuses to release enough of his tax returns to give a clear picture of his finances."
© 2012, Catholic Online. Distributed by NEWS CONSORTIUM
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Pope Benedict XVI's Prayer Intentions for January 2013
General Intention: The Faith of Christians. That in this Year of Faith Christians may deepen their knowledge of the mystery of Christ and witness joyfully to the gift of faith in him.
Missionary Intention: Middle Eastern Christians. That the Christian communities of the Middle East, often discriminated against, may receive from the Holy Spirit the strength of fidelity and perseverance.
Keywords: Buffet Rule, President Obama, election year, Mitt Romney, Swiss accounts
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