The Buffet Rule

Warren Buffet is at it again.  There he goes making sense again.  How much sense can one guy make???

If you’re not already familiar, the Buffet Rule is the name of a bill being offered up to Congress to make sure that the ultra-rich pay their fair share of Federal Income Tax.

Let’s take Mr. Buffet’s taxes for example, which he released today:

Last year he earned $62.86 Million
Federal Tax Paid: $6.9 Million
He paid roughly 10.98% of his income.

Let’s put that into perspective.  If you earn $70,000 a year, that would mean your take home would be $62,300.  As it stands now your take home pay is $51,100, based on a 27% Federal Tax rate. (State Income Tax is not included because not every state has income tax)

The way that these ultra rich get away with this larceny is that Federal Income Tax is levied on wages (your paycheck you get every week), and not income from investments.  Gains from investments is taxed differently and usually at a lower rate than income (wage) tax.  Not to mention all the charitable contribution deductions they get through the various charities they own.. whoops, meant to say help…

Back to Mr. Buffet and his “RULE”.  There are a lot of people out there (politicians with lined pockets mostly) that say that this rule would be bad for the economy because it would hurt small business and the rich that make this country strong.  Really?  So what they’re saying is that these ultra rich, don’t have to pay their fair share to keep this country afloat?  Really?  It’s up to the guy who makes $40K a year to pay the country’s bills…..  I don’t know about you, but I don’t have $14 Trillion just lying around.  But under the Buffet Rule half of that would be erased over the next 10 years.  That means the country can pay its bills, build and improve infrastructure, which means more jobs, which means more income for the government, which means more investment opportunity for the ultra rich . . . . . . . . . wait that means that even under this plan the ultra rich can get richer?  By paying more taxes?  How is that possible?  Oh wait, it is possible because that’s how the economy works.  You have to get the process started in order to create the Butterfly Effect of a growing economy.

And how exactly would it hurt small business?  Most small business owners aren’t millionaires.  And the ones that are millionaires don’t make their money from investments.  They usually get a salary just like everyone else.  I know, I’ve owned businesses since 2000.  Many small businesses are usually “start-ups” that don’t make it past 5 years.  So whatever contribution they make to the economy in terms of taxes, and jobs is usually erased before it can make any kind of real impact.  The Congressional Research Service actually came out with a report today stating,  

“[That] suggests that tax reform policies designed to ensure adherence to the Buffett Rule will affect few small businesses.”

Why am I blathering on about this when I’m not a millionaire?  Because the ultra rich, while important to the economy, have a responsibility to the rest us to help get our economy back on track.  Is paying a little bit more in taxes going to make a millionaire’s life horrible?  Will they not be able to buy the 200ft yacht, and settle for the 100ft?  Awww…  To quote Denis Leary, “Life Sucks, Get A Helmet!”

I usually don’t ask people go one way or the other on a subject, but on this one I have to ask anyone who reads this to tell their Congressmen and Congresswomen that you absolutely support the Buffet Rule and that you will absolutely not vote for them if they don’t pass it.  And if you happen to be one of the ultra rich, give me a dollar! And pay your fair share.

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