Posted on April 19 2012 – 5:00 PM – Posted by: Doug Brady
On Monday, Senate Republicans blocked debate on the Buffett Rule, the 30% tax rate floor called for by President Obama affecting anyone earning more than $1 million a year. If I were in Congress, I’d vote for the Buffett Rule even though it remains highly unsatisfactory. Here’s why:
The Buffett Tax will raise about $47 billion over the next ten years and the federal government will spend vastly more than that – $45 trillion over the next ten years. So the total revenue from the tax is clearly trivial in comparison to the scale of the problem in terms of deficit or debt. I made this point in my discussion with the Chairman of President Obama’s National Economic Council, Gene Sperling. His response was to really not view it in isolation but to view it as one part of a much larger deficit reduction strategy. He said ‘We already have cuts in many programs; we proposed more.’ Sperling implied that President Obama was going to accept even more discretionary spending cuts.
Sperling referenced the deal that President Obama and Speaker John Boehner almost came to this past summer in which there were deep cuts. Sperling said that when cutting programs like Medicaid quite substantially, the Administration is saying ‘We have to balance those on the principle of shared sacrifice by asking those who have been most fortunate over the past decade to pay their fair share.’
I think as a matter of fairness, the Buffett Tax makes sense.