September 28, 2011
CTJ: The Need for the 'Buffett Rule'Citizens for Tax Justice, The Need for the “Buffett Rule”: How Millionaire Investors Pay a Lower Rate than Middle-Class Workers:
This report shows why the Buffett Rule is sorely needed:
- The federal tax system taxes income from work at a much higher rate than income from wealth.
- Buffett’s effective tax rate of 17.4% is typical of taxpayers with $10 million or more of investment income.
- Buffett’s claim that his secretary pays about 30% of her income in federal taxes is not only plausible, but very likely.
- News stories, reports, and blogs that focus only on the amount of federal income tax paid by highincome taxpayers are omitting the substantial amount of payroll taxes that workers pay.
- Critics of the Buffett Rule who cite data showing that the average effective tax rate for the wealthy is higher than the average effective rate for the middle class miss the point of the Buffett Rule.
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Those who insist critics of the Buffett Rule are ignoring payroll taxes paid by workers are ignoring the Earned Income Tax Credit worker's qualify for to help offset the cost of payroll taxes.
Posted by: Pete Terranova | Sep 28, 2011 6:35:30 AM
Excellent point. Wish I made it myself.
Posted by: Peter | Sep 28, 2011 7:35:22 AM
You know that liberals are in trouble when they have to enlist the richest person in the country to make the case for progressivity
Posted by: mike livingston | Sep 28, 2011 9:26:15 AM
Good point. Moreover, for the sake of further intellectual honesty, we should stop pretending that payroll taxes (SS and Medicare) paid by those in (say, in the bottom half) is analogous to paying payroll taxes for those in (say, in the top 10%). The current retirement payouts to each group are already drastically different compared to contributions, AND in any deficit reduction scenario (even as proposed by center-right think tanks), means testing will result in (basically) zero benefits for almost anyone at the top. THUS, overall effective tax rates for the top SHOULD include SS and Medicare taxes, because that is all they are: EXACTIONS. For the rest of the population, they should most certainly be not included, as they are: SAVINGS (even if forced).
Posted by: MG | Sep 28, 2011 10:14:03 AM
That's a good point. This only increases the income gap unless they do something about it.
Posted by: JG Larvan | Sep 28, 2011 11:28:52 PM