Buffett Rule Would Only Bring In $31 Billion Over The Next 11 Years: Report

WASHINGTON — A bill designed to enact President Barack Obama's plan for a "Buffett rule" tax on the wealthy would rake in just $47 billion over the next 11 years, according to an estimate by Congress' official tax analysts obtained by The Associated Press.

That figure would be a drop in the bucket of the over $7 trillion in federal budget deficits projected during that period. It is also minuscule compared to the many hundreds of billions it would cost to repeal the alternative minimum tax, which Obama's budget last month said he would replace with the Buffett rule tax.

The alternative minimum tax, originally aimed at ensuring that wealthy Americans pay taxes despite deductions and other breaks, has begun affecting upper middle-class families. Congress acts every year to minimize its impact.

The Buffett rule has become a leading symbol of Obama's and congressional Democrats' election-year efforts to persuade voters that they are the party championing economic fairness. Republicans have mocked it as one aimed at scoring political points that would have little real budgetary impact.

The plan is named for billionaire investor Warren Buffett, who has said taxes on the rich are too low. Obama has proposed requiring that people earning at least $1 million annually pay at least 30 percent of their income in taxes, but has provided few details.

In an analysis provided to The AP on Tuesday, Congress' Joint Committee on Taxation estimated that a bill introduced last month by Sen. Sheldon Whitehouse, D-R.I., attempting to enshrine Obama's proposal into law would collect $47 billion through 2022. The measure has little chance of advancing soon, especially before the November elections.

Earlier Tuesday, the joint committee had projected that the tax change would net the government $31 billion over that same period of time. In a letter, committee officials said they had earlier overestimated the degree to which wealthy taxpayers would shield their income from the higher taxes by limiting the capital gains they would enjoy from profitable sales of property.

"Now that we have this analysis, I hope the president will stop the class warfare and start leading by putting out real proposals to bring down our debt, get rid of the AMT and reform our broken tax code," Sen. Orrin Hatch of Utah, top Republican on the Senate Finance Committee, said in a written statement, using the alternative minimum tax's acronym.

Hatch's Finance committee GOP aides requested the study.

Whitehouse said other groups, including the respected bipartisan Tax Policy Center, have estimated that the proposal could earn more than the joint panel had estimated.

"No matter how you slice it, that's real money that could help bring down our deficit. Most important: It's simply the right thing to do," he said in a statement.

Whitehouse's bill would require people making at least $2 million a year pay at least 30 percent of their earnings in taxes, though they could deduct certain amounts for their charitable contributions. The tax would be phased in for people earning at least $1 million annually.

Comments

[WakeUpHadEnough]

11:16 PM on 04/17/2012

So the CorporateGOP Senate says that the $4.7 BILLION collected from the Buffet Rule doesn't amount to much at all, yet the $300 million saved from defunding Planned Parenthood is a "lot of money"

REALLY!?!?!?!

[edg1]

03:47 PM on 03/29/2012

This provides an excellent example of why taxes should not be cut in the first place. If you try to raise them in the future, you get all kinds of wailing and gnashing of teeth about how little will be raised and how jobs creation will plummet. Funnily enough, with taxes at record low rates, very little revenue is coming in and very few jobs are being created. I say go ahead and raise the rates. I suspect we won't be any worse off than today and may even be in better shape.

[chackocc]

03:36 PM on 03/29/2012

That settles it, then. Surely, American taxpayers who make at least a million dollars every year can collectively afford to pay $31billion over 11 years, using only the change in their pockets. They won't even have to cut back on their clandestine financing of various Karl Rove PACS or all the Swiftboating projects in the works.

The rich say -- and the working people sometimes parrot the rich -- that the government is in their way. They are absolutely right. The government is the only thing that stands in the way of their rapacious designs for sub-minimum wages, unsafe working places, contaminated food and water, irate citizens tired of relentless exploitation, and a thousand other "bureaucratic regulations" that seek to protect the public.

Without the working people who shill for them, the rich will have to turn to their own ranks for "help" -- although none, of them, I assure you, has ever turned in an honest day's work.

[layopinions]

10:23 AM on 04/10/2012

"although none, of them, I assure you, has ever turned in an honest day's work."

And this is exactly what's at the core of the left's view of the rich. If you don't think they earned their wage, it's easy to justify confiscating/redistributing it.

The problem is that most of them have earned their wages.

[Diskatopia]

04:22 PM on 03/21/2012

The math is not working-- unless the Buffett Rule regulations are giving a huge tax break to one segment of society andf that is offestting the HUGE increase this would bring from JUST the TOP 400 in Income ...

Placing a flat 30% rate on all AGI of JUST the Top400 in income would bring in $12billion to $20BILLION more a year -- $120 to $200 BILLION over 10 years. From just the Top400.

[Diskatopia]

04:44 PM on 03/21/2012

Wait.. would it TOTALLY replace the AMT, or just the AMT on those making less than $250k? If it totally replaces the AMT, it is likely a tax CUT for those making from $100k to $999,999, since the Buffett rule starts at $1million.

Easy fix... KEEP the AMT on those making $250,000 to $999,999.

[wmnorton]

01:36 PM on 03/21/2012

Why is it that everyone keeps ignoring the obvious, Return the capital gains rate back to 25% like it was under Clinton, Make income from dividends ordinary income like it was from the inception of the income tax until GW Bush gave it a special rate in 2003. With these changes most of the really bad results would go away. If we recend the other Bush taxes for the wealthy and leave these we will still have almost all of the current problems.

[layopinions]

10:38 AM on 04/10/2012

A corporation that pays dividends has already paid taxes on that money. The government collects taxes on the company's profits. The remainder is then reinvested in the company (increasing the value of the stock) and/or paid out as dividends.

Capital gains taxes are then collected when investors transfer their stock or collect dividends, but it is the same money that just got taxed at the corporate rate for being profit. No further value was added in the transaction, the government just takes another scoop out of the same profits.

All capital gains taxes are a double dip. The capital gains rate should be 0%. Either that or the corporate tax rate should be 0% if you want to, instead, levy taxes against investor gains as normal income.

[oilfield]

01:29 PM on 03/21/2012

tax the rich will solve all of the problems.......not

[Diskatopia]

04:28 PM on 03/21/2012

Actually, the Buffett rule must have hidden deductions, otherwise the increased revenue would be at least $50 billion A YEAR.

Increasing the tax rate on the wealthy will solve many economic problems, if we just would add back a 50% rate on income above say $2million and a $70 rate on above $10million, similar to what we had in the 1960s. These rates would WIDEN the tax base by incentivizing the wealthy to invest their money in DEDUCTIBLE business infrastructure, which would create jobs, and likely better paying jobs, which ... widens the tax base. When given the choice of paying in the money as taxes or getting utility out of it (deductible investment) most wealthy will choose the deductible investing.

[oilfield]

09:59 PM on 03/21/2012

if money comes from a company and its left in the company, you get taxed at 35% and then again at your tax bracket....lowering corporate taxes is what we need to do if we want more corporate investment.....so in the magic days of super high tax brackets, there was also a lower 10% bracket....are we going to implement that too? also, if you raise taxes too much you have folks that invest like buffet, buy and hold forever....then you get no tax revenue....is that good? low taxes has shown that it increases revenue....

[halfpricefaustian]

12:55 PM on 03/21/2012

It may not solve the problem completely, but it helps. The analysis just means it doesn't go far enough, not that it shouldn't be done. There should also be a Buffett rule for corporations as well. After all, according to conservatives, corporations are people and shouldn't be exempt.

[mdsman]

12:21 PM on 03/21/2012

Ahh the rants are amusing.

STOP THE BIG OIL SUBSIDIES AND GAS WILL COME DOWN - oops, only $4billion
MAKE WORK PAY tax break - oops, avg $11/wk/person
SS TAX HOLIDAY - oops, avg $20/week
BUFFETT RULE - oops, $3-4 billion per year

These are all just kabuki theater to pretend that anything is being done
Those that vet for this administration suck.....

[oilfield]

01:30 PM on 03/21/2012

we have a spending problem that can only be fixed through inflation.....

[tundra599]

02:22 PM on 03/21/2012

You MUST submit that to whoever is opposing Obama to be made into a campaign commercial. Beautiful points!

[Kenz300]

11:48 AM on 03/21/2012

It is a question of fairness..................

[mdsman]

12:23 PM on 03/21/2012

So, does your question of fairness extend to the significant portion of the citizens that pay no fed income tax?

Willing to bet that if we collected on that it would be more than $4 billion/yr

[wmnorton]

01:40 PM on 03/21/2012

Are you refering to the 49% of the people who make so little from working that they owe no tax, or are you refering to the 1470 individuals who made $1 million last year but paid zero tax?

[oilfield]

01:31 PM on 03/21/2012

not when raising taxes may make revenue fall....

[edg1]

03:56 PM on 03/29/2012

Lowering taxes makes revenue fall. That has been proved time and again.

[Defender of Truth]

11:31 AM on 03/21/2012

"A drop in the bucket"? This is always an excuse not to do something about taxes. But remember that drop after drop after drop makes a bucket full.

[OKBLUESKY]

11:30 AM on 03/21/2012

Every flood starts with the first rain drop.

[humilityisrare]

10:28 AM on 03/21/2012

At least it would help offset the cost of the First Family's vacations and trips.

[Thanks4Watching]

08:12 AM on 03/21/2012

"Job creators" don't use their personal income to create jobs. You know, the money they take home every day in those gargantuan bonuses the likes of which we'd only see in our dreams?

I don't know what's worse, the fact that they try to say that they do, or that people believe them.

[oilfield]

01:32 PM on 03/21/2012

they probably drive old cars, clean their own homes, never build/remodel their homes, go out to eat.....

[Y3rMawm]

05:00 AM on 03/21/2012

$30 Billion-$40billion over 11 years...right. Let's wrap a little perspective around this, shall we?

The Federal government spends roughly $10 Billion PER DAY! Not to mention, how much this will cost businesses and individuals in terms of compliance, and stolen wealth that will eventually be used to produce real world stuff, rather than pushing paper.

[edg1]

04:02 PM on 03/29/2012

Whatever are you ranting about? Four days funding is four days funding. Better than nothing.

[Markrsm]

02:27 AM on 03/21/2012

Dear Friends,

He creates a charitable trust to hide all his wealth from taxes for every, and then says, the government needs to increase taxes.

Why not just give you money to the government Mr Buffett as they are so good at spending it, it would seem you should give them all your money, instead of your fake charity to avoid ever paying taxes.

[wmnorton]

01:50 PM on 03/21/2012

Warren made his money when taxes were fair, he knows something you apparently don't, Demand side economics works, supply side economics sucks. Supply side economics does what it was designed to do, concentrate wealth at the top. Also do you know that Warren will not be passing all his wealth on to his son? It is in the trust and stays there after Warren is gone. Too bad the Koch brother's father wasn't as enlightened as Warren Buffet.

[Markrsm]

10:04 PM on 03/21/2012

Dear wmnorton,

You are very much incorrect, Mr Buffett has not paid a cent in taxes on the majority of his wealth. We have been living demand side economics for the last 16 years.

When you make something, you hire people, the people you hire get paid a salary, and they are able to buy stuff, and they pay taxes.

http://www.census.gov/foreign-trade/statistics/historical/gands.pdf

When you increase demand without an increase in supply, you run a trade deficit, the trade deficit means that you are exporting money.

So the value of your money goes down, and things like oil costs more, and working people start to lose ground, and you have less working people.

Once this happens, government are forced to cut back as, you have less people making stuff, you have less private sector employees to tax.

First you run huge deficits, then after you can no longer borrow, you have huge massive cut backs.

Guess, what we are at the huge deficits part, but the no longer able borrow part is coming in 2013.

Hope you are ready for it.