About the Buffett bullsqueeze
By Neal Boortz
Let’s go to the transcript: Here’s what Ceasar Obammus had to say about Warren Buffett in his campaign speech last night.
Right now, Warren Buffett pays a lower tax rate than his secretary … Tax reform should follow the Buffett rule: If you make more than $1 million a year, you should not pay less than 30 percent in taxes … Now, you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.
Here we have a benefit flowing to Obama from our government education system. We have government educated voters in this country who couldn’t tell you the difference between a profit and a profit margin if their refundable tax credits depended on it. In fact, they don’t understand the difference between a standard tax credit and a refundable tax credit – but that’s another story.
Let’s be blunt (not difficult for me). The statement that “Warren Buffet pays a lower tax rate than his secretary” is an intentional, premeditated lie. This statement was aimed at government educated idiots predisposed by three years of Obama class warfare rhetoric to hate the wealthy. Here are two absolute and profound truths for you to digest:
- Warren Buffet pays EXACTLY the same tax rate as his secretary pays on the same taxable earned income.
- Warren Buffet’s secretary pays EXACTLY the same tax rate on her capital gains as does Warren Buffet.
Look closely at Obama’s statement. He says that Buffet pays a lowe TAX rate than his secretary, not a lower INCOME TAX rate. The point is that Obama is paying an entirely different tax in Obama’s scenario. He’s paying capital gains taxes, she’s paying income taxes. The capital gains tax rate is fixed at 15% .. for both Buffet AND his secretary. The income tax rate ranges from 15% to 35%, and both Buffet and his secretary will pay the same rate on the same level of taxable earned income.
So now we have Obama saying that the rich – those with income of over one million a year – should pay no less than 30% in taxes. Here we have Obama calling for a 30% capital gains tax rate. This would be devastating for our economy. If you want to talk about chasing wealth overseas – a 30% capital gains tax rate would do it.
Then we have the Democrat’s "Buffett rule." Evil millionaires should not pay lower effective tax rates than middle-class people. That’s the theory anyway. The fact is that millionaires DO NOT pay a lower effective tax rate than the middle class. According to the Tax Foundation the average effective tax rate of American taxpayers is 11%. Millionaires pay about 25%. Yes .. Romney pays less. That would be because Romney has essentially been running for president for about seven years right now, and not working to earn an income. His income comes from investments, and that income is paid at the capital gains tax rate of 15%. The Democrats are sure to demonize Romney because he isn’t paying income taxes on capital gains income. Well – income tax rates are for earned income. Romney is paying exactly what he is SUPPOSED to pay, capital gains taxes. How does this compare to what others are paying? Romney is paying a higher effective tax rate than 97% of the America people. More on this later in the Nuze.
Maybe I should spend a minute on “effective tax rates.” Wht’s that? The effective tax rate is the amount of tax an individual or firm pays when all other government tax offsets or payments are applied, divided by total income. Example: Your total income is
$1,000,000. You have various tax deductions equaling $250,000. Part of your income is capital gains taxed at 15%, and part of your income is earned income taxed at 35%. Your total tax liability – capital gains taxes an income taxes -- is $180,000. Your effective tax rate is 24%.
Are these effective tax rates “fair”? I don’t know, why don’t you be the judge? Here’s a little fact to consider from the Cato Institute:
But the Congressional Budget Office shows that Buffett Rule is already in effect. The highest earners pay more than double the amount of taxes as a share of their income than middle income earners. The top 1 percent of earners currently pays 29.5 percent of their income in all federal taxes while middle income families pay 14.3 percent.
But that’s not all. Take a look at this and explain to me how Barack Obama can still claim that the rich aren’t paying their fair share:
Upper-income taxpayers have paid a growing share of the federal tax burden over the last 25 years.
A 2008 study by the Organization for Economic Cooperation and Development, for example, found that the highest-earning 10% of the U.S. population paid the largest share among 24 countries examined, even after adjusting for their relatively higher incomes. “Taxation is most progressively distributed in the United States,” the OECD study concluded.
Meanwhile, the percentage of U.S. households paying no federal income tax has been climbing, and reached 51% for 2009, according to a new analysis by the Joint Committee on Taxation.
Barack Obama is pushing this Buffett bologna for one reason and one reason only: To pander to the mindless ignoranuses who don’t know any better and are driven by some primeval quest for revenge … Those rich people shouldn’t be able to keep all of that money that they probably got illegally or because they inherited it! I want the government to take it away from them and give it to me because I, as an entitlement-mooching American, by God deserve it.
Is Obama’s class warfare rhetoric working? There’s a recent study which shows that in 2009, when Obama took office, Americans thought that there was little or no class conflict between the rich and the poor. Now, in 2012, the polls show “strong to very strong” conflict between these two groups. So .. .the answer is a resounding YES. Three years of Obama class warfare rhetoric is having its desired effect.
At a time when people are vulnerable, they’ve lost jobs, they’ve lost houses, they are paying more for gas and for healthcare, it’s easy to get caught up in the idea of having the government plunder on your behalf. All you have to do is show up to the polls and vote for Democrats and your job is basically done. Too bad there comes a point where the producers can only handle so much plunder, their investments begin to dwindle, they hire less people, they retire early and all of the sudden, there are no more pockets to pillage. Then what?
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