UPDATED BELOW
So the big news over the weekend was the leaking of President Obama’s proposed “Buffett Rule.” Details are sketchy at this point, but he seems to be proposing that anyone with an annual income of $1 million or more face a minimum income tax rate at least comparable to that paid by middle-class Americans. The name is derived from a NYT op-ed that gazillionaire investor Warren Buffett recently authored in which he decried the fact that – because investment income is subject to only the 15% capital gains tax rate – he and his fellow “mega-rich friends,” who derive most of their income from investments, often pay a lower tax rate than does his cleaning lady.
So the big news over the weekend was the leaking of President Obama’s proposed “Buffett Rule.” Details are sketchy at this point, but he seems to be proposing that anyone with an annual income of $1 million or more face a minimum income tax rate at least comparable to that paid by middle-class Americans. The name is derived from a NYT op-ed that gazillionaire investor Warren Buffett recently authored in which he decried the fact that – because investment income is subject to only the 15% capital gains tax rate – he and his fellow “mega-rich friends,” who derive most of their income from investments, often pay a lower tax rate than does his cleaning lady.
Well, hell – it’s about damned time someone suggested this, and not only because it is obscene that hedge fund managers like John Paulson (who would be in jail on fraud charges if he worked in any field other than the American financial industry) can make more than a thousand million ($1B) dollars a year and pay a lower tax rate than a firefighter or a school teacher. But also because taxing investment income at a lower rate than earned income hurts the economy by sucking money out of economically productive enterprises.
And we really shouldn’t be doing that.
