Buffet rule - Class Warfare or Simple Math?

I received this today from the Obama administration after President Obama announced the "Buffet rule" at a Rose Garden ceremony today:

This morning, the President proposed the "Buffett Rule," which would require those earning more than $1 million a year to pay the same share of their income in taxes as middle-class families do.

This proposal makes sure millionaires and billionaires share the responsibility for reducing the deficit. It would correct, for example, the fact that Warren Buffett's secretary currently pays taxes at a higher rate than he does.

The other side is already saying it's "class warfare" -- that's their rhetorical smokescreen for providing millionaires and billionaires special treatment.

As the President said this morning, "This is not class warfare -- it's math."

The wealthiest Americans don't need further tax cuts and in many cases aren't even asking for them. Requiring that they pay their fair share is the only practical way forward. The Republican alternative is to drastically slash education, gut Medicare, let roads and bridges crumble, and privatize Social Security. That's not the America we believe in -- but many in the Republican leadership actually prefer those policies, which explains their refusal to act.

That's why they'll say "tax increase" over and over again, trying to muddy the waters and trick ordinary Americans into thinking the Buffett Rule will hurt them. And if we don't speak out right now, they just might get away with it.
Of course, the Buffett Rule won't really touch most Americans -- only 0.3% of households will even be affected.

And without it, the only way to reduce our debt is to savage the programs that seniors and middle-class families rely on.

That's exactly what the President refuses to do -- in fact, he's said he'll veto any bill that changes benefits for folks who rely on Medicare but doesn't raise serious revenue by asking the wealthiest Americans or biggest corporations to pay their fair share.

This isn't just a commonsense approach to cutting the deficit -- it's the only way to make sure we can provide security to people who work hard and play by the rules.

So right now, I'm asking you to say you'll stand with the President on something that won't be easy. Get the President's back today:

http://my.barackobama.com/Buffett-Rule

Thanks,

Messina

Jim Messina
Campaign Manager
Obama for America

My question is why do we distorting the facts? It is true the Warren Buffet effective tax rate is less than his secretaries nominal rate but if his secretary is making under $60,000 there is a very good chance that she pays 0% in an effective tax rate. So why don't we all get on the same page when talking about these rates. That being said it is widely accepted that our revenue, no matter the tax rate, ranges between 16-18% of GDP historically. The other widely accepted truth is that our current spending is north of 22% of GDP.

To get a handle on our deficit spending is not to raise revenue as President Obama would like for us to think; rather we need to get our spending under control. Notice that President Obama is not out there trying to defend the $535M given to Solyndra from the last Stimulus package that has now gone belly up! Perhaps we could use that money to help fix Medicare, Medicaid or SSN. Instead the notion is to raise taxes on the wealthy and claim it is not class warfare.

If we want to get serious about our deficit then start with the tax code. Flatten the tax code to 8% and eliminate all tax credits and deductions for everyone. Eliminate the corporate tax rate, and all tax credits and incentives, as corporations simply pass along those taxes onto the consumer. Then on investment income - raise short term capital gains to 55% while putting long term capital gains at 15% - this will curb some of the hedging that exists and encourage people to think long term as well.

Rep. Ryan's Roadmap: Can we look at it without Partisan Glasses?

Rep. Ryan (R-WI) unveiled his Roadmap for America this week. As anticipated the reactions have been predictable from the Left from scaring the elderly in believing their Medicare is going away, the rich will get all the breaks, and changes to SSN will keep it from those that are poor or disabled. Let's look at it and see where it really goes. Shortly after the Obama was elected President he commissioned a bipartisan group to tackle the deficit and propose a plan. While I did touch on the results and did not like all the things found within it, why has Obama backed away from it?

But I digress. Here are the high points, per the Roadmap, put forth by Rep. Ryan(http://www.roadmap.republicans.budget.house.gov/UploadedFiles/Roadmap2Final2.pdf):

Health Care

Provides a refundable tax credit – $2,300 for individuals and $5,700 for
families – to purchase coverage in any State, and keep it with them if
they move or change jobs.

Establishes transparency in health care price and quality data, so this
critical information is readily available before an individual needs health
services.

Modernizes Medicaid and strengthens the health care safety net by
reforming high-risk pools, giving States maximum flexibility to tailor Medicaid programs to the specific needs of their populations. Allows
Medicaid recipients to take part in the same variety of options by using
the tax credit to purchase high-quality care.

Medicare

Preserves the existing Medicare program for those 55 or older.

For those currently under 55 – as they become Medicare-eligible –
creates a Medicare payment averaging $11,000 per year when fully
phased in. Adjusts the payment for inflation, and pegs it to income, with
low-income individuals receiving greater support. Provides risk
adjustment, so those with greater medical needs receive a higher
payment.

In addition to the Medicare payment, establishes and fully funds Medical
Savings Accounts [MSAs] for low-income beneficiaries (to cover out-ofpocket costs), while continuing to allow all beneficiaries, regardless of
income, to set up tax-free MSAs.

Makes Medicare permanently solvent, based on Congressional Budget
Office [CBO] estimates and consultation with the Office of the Actuary
of the Centers for Medicare and Medicaid Services.

Social Security

Preserves the existing Social Security program for those 55 or older.

Offers workers under 55 the option of investing over one third of their
current Social Security taxes into personal retirement accounts, similar to
the Thrift Savings Plan available to Federal employees. Includes a
property right so they can pass on these assets to their heirs, and a
guarantee that individuals will not lose a dollar they contribute to their
accounts, even after inflation.

Makes the program permanently solvent, according to the CBO, by
combining a more realistic measure of growth in Social Security’s initial
benefits, with a gradual, modest increase in the retirement age, consistent
with Americans’ improving lifespans.

Tax Reform

Provides taxpayers a choice of how to pay their income taxes – through
existing law, or through a highly simplified income tax system that fits
on a postcard with just two rates and virtually no special tax deductions,
credits, or exclusions (except the health care tax credit).

Simplifies tax rates to 10 percent on income up to $100,000 for joint
filers, and $50,000 for single filers; and 25 percent on taxable income
above these amounts. Also includes a generous standard deduction and
personal exemption (totaling $39,000 for a family of four).

Eliminates the alternative minimum tax [AMT].

Promotes saving by eliminating taxes on interest, capital gains, and
dividends; also eliminates the death tax.

Replaces the corporate income tax – currently the second highest in the
industrialized world – with a border-adjustable business consumption tax
of 8.5 percent. This new rate is roughly half that of the rest of the
industrialized world.

So where in here does Rep. Ryan look to take SSN and Medicare away from the elderly? How are the rich getting rich?