BUSINESS

Super-Rich Could Likely Get Around Buffett Rule: Report

03/22/2012 12:42 pm ET

Even if some of President Obama's more controversial proposals for taxing the rich get turned into law, America's wealthiest families may still be able to avoid forking over more cash to Uncle Sam.

If the Buffett Rule, a progressive tax proposal in Obama's budget plan named after billionaire investor Warren Buffett, becomes law, many millionaires would likely be able to legally avoid paying the required 30 percent minimum tax rate, according to a Congressional estimate cited by the Wall Street Journal.

The rule was inspired by a Buffett op-ed in The New York Times in which he noted that he pays a smaller share of his taxes than his secretary. When Obama included provisions, like the Buffett rule, to raise taxes on the rich as part of his budget proposal in February he set up an ideological battle with Republican presidential candidates, many of whom have proposed cutting taxes.

Still, even if the Buffett Rule made it into law past staunch congressional opposition -- and every millionaire paid what was required -- it would far from solve America's deficit problem. Indeed, the Buffett Rule would bring in only $47 billion over the next 11 years, compared to the more than $7 trillion in federal budget deficits projected during the same period, according to a recent report.

In addition, it would cost hundreds of billions of dollars to repeal the alternative minimum tax, the provision currently in place that's aimed at ensuring the wealthy pay their fair share in taxes.

Complications aside, many of America's super rich still agree with the idea of paying more in taxes. Microsoft co-founder billionaire Bill Gates said in October that he's "generally in favor of the idea that the rich should pay somewhat more," than everyone else in taxes. Hip-hop mogul Russell Simmons also said last year that "we need to make the rich pay their fair share."

And it's not just the famous super-wealthy that are willing to pay more in taxes; 68 percent of millionaires said they support a tax increase on those making $1 million or more, according to a survey last year from the Spectrum Group.

Still, some think that if the rich want to pay more in taxes they should take matters into their own hands. New Jersey Governor Chris Christie told CNN last month that instead of trying to raise taxes, Buffett should "just write a check and shut up."

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