Thank Romney for Underscoring Need for “Buffet Rule”

After losing the South Carolina Primary to Newt Gingrich, possibly in part due to his waffling at the pre-Primary debates about releasing his tax returns, Mitt Romney released his tax returns for the past two years, which show that he paid about 14% in federal taxes on income of nearly $43 million. The timing of Romney’s tax return release was impeccable- for Democrats. For months, President Obama and Democrats have been attacking Republicans for wanting to maintain tax breaks and loopholes for the super-wealthy. Last August, Warren Buffet pointed out in an op-ed that he paid a lower federal tax rate than his secretary in 2010. He paid about 17.4%, whereas his office staff paid an average of 36%. Buffet rightly pointed out that this simply isn’t fair. He added, “it’s time for our government to get serious about shared sacrifice.”

Last October, the non-partisan Congressional Research Service released a report that indicated 25% of all households earning at least $1 million annually are paying a smaller share of their income than a large segment of the middle class. The report adds that 94,500 millionaires pay a lower tax rate than most of the middle class and that 7,000 millionaires pay no income taxes at all.

The reason for this is because of the payroll tax (Social Security tax), which doesn’t tax income above $107,000, and the capital gains tax rate, which is 15%. Investment income is usually taxed at this rate, which is much lower than earned income tax rates. Many of the super-wealthy make their money via investment income rather than earned income.

President Obama has talked about “the Buffet rule” as a way to help fight the budget deficit by implementing a higher minimum tax rate for people in the highest income bracket, to ensure they don’t pay a lower percentage of income in taxes than the middle class. As he has stated, millionaires shouldn’t be paying lower tax rates than their secretaries. Mitt Romney’s revelation that he paid an effective federal tax rate of 14% underscores the notion that it is completely unfair for the super wealthy to pay less in overall taxes than the middle class. And it adds to the powerful narrative that was created by the Occupy Wall Street movement, whose underlying theme deals with the challenges posed by the incredible gap between the top 1% of earners in the U.S. and the rest of the country, and the disproportionate amount of power that the top 1% hold. Romney’s tax returns show that we are in dire need of tax reforms that will create a fairer revenue system. If Romney becomes the GOP nominee, which seems pretty likely at this point, you can count on Romney’s ridiculously low tax rate as becoming a major campaign issue. It will help show that the GOP’s insistence in preserving Bush’s tax cuts for the wealthy and Romney’s advocacy for even more tax cuts for top earners are entirely out of touch with our federal budget deficit reality and lack any sense of fairness. So I thank Mitt Romney for serving as a poster-child for all that is wrong with the fiscal policies he and his party tirelessly support.

5 Replies to “Thank Romney for Underscoring Need for “Buffet Rule””

  1. Agreed! And to put this in a perspective for Mormons… If Romney paid a full tithe on all of his 43 Million dollar increase (which according to his Tax Returns he did) than why pay half the tax rate that most Americans pay?! If he considers profits from investments and dividends "earned income" according to the church than what exempts that money from being taxed or taxed at a lower rate than middle class citizens!!!

    1. I think this site is very interesting–thank you! I’m not registered as a Republican or Democrat–I actually never paid attention to politics before. So in order to see both sides, I have been visiting websites/blogs and seeing which values jive with me more.

      But with respect to the comment: President Obama has talked about “the Buffet rule” as a way to help fight the budget deficit by implementing a higher minimum tax rate for people in the highest income bracket.

      “Someone calculated that the taxes he [Obama] would raise in his Buffett Rule would pay for 11 hours of government.” and this statement was fact checked at: http://www.washingtonpost.com/blogs/fact-checker/post/mitt-romneys-correct-stat-on-the-buffett-rule/2012/04/23/gIQAJ4NzcT_blog.html

      I guess the Buffet Rule would help (not counting that the argument that these super wealthy are investing in companies that will hopefully create jobs and pay more taxes)…but the rule would help just a tiny, tiny bit. But why would President Obama (or is it the media?) spend so much time talking about this when the financial impact on the deficit is so minuscule?

      With 8,765.8 hours in a year, the “Buffet Rule” will only cover 0.1% of the budget. So I think the statement about “out of touch with the federal budget deficit reality” is a strong statement for only 0.1%.

      If it is truly about “fairness” why does Buffet and Pres. Obama (20.5% tax rate paid in 2011 which was less than his secretary) need a law to make them pay a higher tax rate? Why can’t they just take the higher road and pay the taxes without a law forcing them? Why do they need to be forced to be fair with their own money? Is it too much to be fair on one’s own volition–or are we to the point where we elect officials because they know what is right for us and make us do it because we won’t without a law?

      And when scandals like GSA and the estimated (albeit debatable) $60 Billion in medicare fraud every year, isn’t it fair for the government to control known problems like these before they ask for more money? Or is the government too big to know what is going on in each department and is unrealistic for them to eliminate these kinds of waste? What is really “fair?”

      It seems like some of these programs are like water in a bucket with a hole in it. You can work on stopping/making the hole smaller or you can try and put more water in it to keep it at the same level. I don’t know what the right answer is…

    2. This pisses me off as a NJ Republican and I do not think that I am alone. I feel colmletepy disconnected from my party now.We want a real conservative running in 2012 not some flip flopping closet massachusetts liberal!Since Christie basically rules the NJGOP with an iron fist, I now see the direction the plan on taking. I will be sitting this 2011 election out for sure. Clearly none of the NJGOP supported Republicans are the types of conservatives that we should have running our government.And to think, if the Governor had just worried about staying home and working on NJ issues for the next month I would have come out and voted for the GOP in the 2011 election. Now I don’t have to waste my time.

  2. Aaron – you are my brother from another mother. I am amazed at how closely we think about things. I have a cousin who was part of the BYU Dems (Jake Rugh) and believe you and I have something to offer the LDS community.

    I own the domain http://www.mormondems.com and have been writing on a blog (www.modleft.com) since 2005 with little to no traction. I have an idea to get a collective group together to publish on one site various lds dem perspectives. I also have the twitter name @mormondems.

    Linked in profile is here in case you are wondering about what I do:
    http://www.linkedin.com/profile/view?id=6864790&trk;=tab_pro

    Check out my work and drop me a line if you are interested in working together. I have others I am going to start recruiting.

    Matt
    ncmish (at) gmail (dot) com

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