The U.S. Senate yesterday failed on a vote to proceed to the consideration of a provision submitted by Senator Sheldon Whitehouse (D-RI) to impose a new tax on taxpayers with more than $1 million of income. The proposal is not that simply stated but it has taken on an isolated life of its own. Known as the Buffett tax or Buffett rule depending on your point of view, it has become the war chant for liberals and Mr. Obama and a rallying point for no-tax Republicans.
The proposal was scored by the Congressional Joint Committee on Taxation to increase taxes by about $46 billion over a ten-year period, a sum representing about 12 days of current deficit spending. Let’s say that again. The solution by the Democrats to reduce the federal deficit running at over a trillion dollars a year will be filled over the next ten years by a provision covering 12 days of current deficit.
The exercise by the Senate on this largely symbolic measure is a waste of time, a political embarrassment, representative how neither the Senate Democrats nor the Administration are really serious about any of the fiscal problems of the country. It is deceptive, a farce and a disservice. This kind of politics makes me angry, cynical and sad.
Even though I do not like them, I do understand the politics. There is an enormous gap between the two parties on the issues of the deficit, government spending and tax fairness, whatever that is. Democrats are trying to use a useless and misdirected proposal to highlight the differences as they see it. So-be-it. If they think this will cure, help or do anything, they are deceiving themselves.
The tax system in this country as well as the size of deficit and the largess of the government are out of whack. It needs immediate attention. It needs serious discussion, adult consideration and cooperation among policymakers of all viewpoints. That is not happening and will not happen anytime soon. I do not know what it will take to get to that point. Another meltdown?
I am not defending not raising taxes on anyone. I do know that a great disproportionate of taxpayers pay the bulk of the taxes in this country. Almost 50 percent do not pay any income taxes at all. In fact, lower income taxpayers also get generous refundable credits, like the earned income and child credits, that remove them even further from being a member of the tax paying public.
I also know tax rates for upper incomes are generous and in the scheme of an overall overhaul should be considered. However, there is a limit on how much a person should have to pay as a percentage of his income. If not then, why not just take it all over a certain amount? To portray that enacting the Buffet tax is the panacea is just intellectually dishonest.
I do not buy into the Republican mantra that raising taxes on certain groups is anti-growth or that any particular group is responsible for creating all new jobs. It is more complicated than that. There are many reasons the economy is sluggish. Republicans would be best served by focusing on reforming the tax code, rather than defending the status quo even though they were right to oppose the Buffett tax in this instance.
My expectations for any positives steps by either party are nil but for today the Senate Democrats deserve the blame.