WHITE HOUSE: The Buffet Rule

A Basic Principle of Tax Fairness

Promise the Children Received this ReportEMBARGOED+Updated+Buffett+Rule+Report-2.pdfissued by the White House today. We want to share it with you. There are several interesting graphs in the pdf version of this report.  It has some very interesting new information…..

The Buffett Rule is the basic principle that no household making over $1 million annually should pay a
smaller share of their income in taxes than middle‐class families pay. Warren Buffett has famously
stated that he pays a lower tax rate than his secretary, but as this report documents this situation is not
uncommon. This situation is the result of decades of the tax system being tilted in favor of high‐income
households at the expense of the middle class. Not only is this unfair, it can also be economically
inefficient by providing opportunities for tax planning and distorting decisions.

The President has proposed the Buffett Rule as a basic rule of tax fairness that should be met in tax reform. To achieve this principle, the President has proposed that no millionaire pay less than 30 percent of their income in taxes.

Why the Buffett Rule Is Needed

The average tax rate paid by the very highest‐income Americans has fallen to nearly the
lowest rate in over 50 years. The wealthiest 1‐in‐1,000 taxpayers pay barely a quarter of their
income in Federal income and payroll taxes today—half of what they would have contributed
in 1960. And, the top 400 richest Americans—all making over $110 million—paid only 18
percent of their income in income taxes in 2008.

Average tax rates for the highest income Americans have plummeted even as their incomes
have skyrocketed. Since 1979 the average after‐tax income of the very wealthiest Americans –
the top 1 percent – has risen nearly four‐fold. Over the same period, the middle sixty percent
of Americans saw their incomes rise just 40 percent. The typical CEO who used to earn about
30 times more than his or her worker now earns 110 times more.

Some of the richest Americans pay extraordinarily low tax rates—as they hire lawyers and
accountants to take particular advantage of loopholes and tax expenditures. The average tax
rate masks the fact that some high‐income Americans pay near their statutory tax rate, while
others take advantage of tax expenditures and loopholes to pay extraordinarily low rates—and
it is these high‐income taxpayers that the Buffett rule is meant to address .

Of millionaires in 2009, a full 22,000 households making more than $1 million annually
paid less than 15 percent of their income in income taxes — and 1,470 managed to
paid no federal income taxes on their million‐plus‐dollar incomes, according to IRS data.

Of the 400 highest income Americans, one out of every three in this group of the most
financially fortunate Americans paid less than 15 percent of their income in income
taxes in 2008.

Many high‐income Americans are paying less in taxes than middle class Americans in taxes.
Nearly one‐quarter of all millionaires (about 55,000 taxpayers) face a tax rate that is lower than
more than millions of middle‐income taxpayers. This is fundamentally unfair.

Posted by Sue Kirby on 04/10/12  •  Comments 0   •  

Supreme Court challenge to Health reform will impact over 9 million kids.

Yesterday the Supreme Court began hearing the first arguments in the legal challenge to the health reform law. Supporters of the legislation demonstrated outside, packing the grounds around the Supreme Court in favor of greater health protections for families.

The oral arguments began against the Affordable Care Act threatening to overturn the law. Among many parts of the law that are being challenged are provisions that are key to insuring that kids can’t be denied coverage based on pre-existing conditions. A planned expansion of the Medicaid program will also be under attack.

This Medicaid expansion is projected to provide coverage to 7 to 8 million children. Together with the 1.2 million children added to the rolls of the Children’s Health Insurance Program in recent years, health reform is clearly too important to needy children to let go without a fight.

Let your friends and elected representatives know you support the health reform law!

Posted by Sue Kirby on 03/27/12  •  Comments 0   •  

Center for Budget and Policy Priorities on Chairman Ryan’s Budget Plan

By Robert Greenstein

“The new Ryan budget is a remarkable document — one that, for most of the past half-century, would have been outside the bounds of mainstream discussion due to its extreme nature.

“In essence, this budget is Robin Hood in reverse — on steroids. It would likely produce the largest redistribution of income from the bottom to the top in modern U.S. history and likely increase poverty and inequality more than any other budget in recent times (and possibly in the nation’s history).

“It also would stand a core principle of the Bowles-Simpson fiscal commission’s report on its head — that policymakers should reduce the deficit in a way that does not increase poverty or widen inequality.”

View the full statement:
http://www.cbpp.org/cms/index.cfm?fa=view&id=3712
http://www.cbpp.org/files/3-21-12bud-stmt.pdf 4 pp.

Posted by Sue Kirby on 03/21/12  •  Comments 0   •