President Obama’s beloved Buffett Rule failed today in the United States Senate. The Wall Street Journal reported that every Republican voted against the measure with the exception of Senator Susan Collins from Maine. (Shocking, I know.) All of the Democrats voted for it, except for Arkansas Senator Mark Pryor. I guess Pryor understands basic math. The Democrats only received 51 votes, and they needed 60 to move it forward.
Let’s hope we put this behind us, as it’s getting pretty trying listening to Obama coming up with new and creative ways to sell the tax increase. Earlier James Pethokoukis pointed out the latest inanity the president has been spewing.
Obama’s strongest argument, really, was his moral one: that having the rich pay a lower tax rate than middle-class voters was just plain unfair from an income inequality perspective. But now he seems to have abandoned that one, as well:
That is not an argument about redistribution. That is an argument about growth,” Obama said in response to a reporter’s question at a news conference in Colombia. “In the history of the United States, we grow best when our growth is broad based. This is not an argument about taking from A to give to B. This is not a redistributionist argument that we’re making. We’re making an argument about how do we grow the economy in a 21st century environment,” Obama said.
Really? If there is an Obama Rule, it is the one he articulated back in 2008 to Joe the Plumber, that we need to raise taxes to “spread the wealth around.” But I guess “spread the wealth” isn’t polling as strongly as Team Obama would like in 2012. (Read More)
Well, it’s a good thing the bill failed. Just today CNBC reported that a record number of Americans have renounced their US citizenship because of our crazy tax policy. The Buffett Rule surely would have made matters worse.
Last year, almost 1,800 people followed Superman’s lead, renouncing their U.S. citizenship or handing in their Green Cards. That’s a record number since the Internal Revenue Service began publishing a list of those who renounced in 1998. It’s also almost eight times more than the number of citizens who renounced in 2008, and more than the total for 2007, 2008 and 2009 combined.
But not everyone’s motivations are as lofty as Superman’s. Many say they parted ways with America for tax reasons.
The United States is one of the only countries to tax its citizens on income earned while they’re living abroad. And just as Americans stateside must file tax returns each April — this year, the deadline is Tuesday — an estimated 6.3 million U.S. citizens living abroad brace for what they describe as an even tougher process of reporting their income and foreign accounts to the IRS. For them, the deadline is June.
The National Taxpayer Advocate’s Office, part of the IRS, released a report in December that details the difficulties of filing taxes from overseas. It cites heavy paperwork, a lack of online filing options and a dearth of local and foreign-language resources.
For those wishing to legally escape the filing requirements, the only way is to formally renounce their U.S. citizenship. Last year, IRS records show that at least 1,788 people did, and that’s likely an underestimate. (Read More)
Rather than doing something about simplifying the tax code, the Democrats want to make it even more complex. It’s insane.
Oh, and while we’re on the subject of taxes and “fairness,” let’s not forget who pays the most in taxes in the United States.
According to statistics compiled from the Internal Revenue Service (IRS) by the Tax Foundation, those people making above $50,000 had an effective tax rate of 14.1 percent, and carried 93.3 percent of the total tax burden.
In contrast, Americans making less than $50,000 had an effective tax rate of 3.5 percent and their total share of the tax burden was just 6.7 percent.
Americans making more than $250,000 had an effective tax rate of 23.4 percent and their total share of the tax burden was 45.7 percent.
Out of the 143 million tax returns that were filed with the IRS in 2010, 58 million – or 41 percent – of those filers were non-payers.
In other words, only 85 million actually paid taxes.
But Tax Foundation data also shows that people who didn’t pay any income tax received $105 billion in refundable tax credits from the IRS. (Read More)
If you happen to be one of the 85 million who pay taxes, don’t you feel like a chump? I know I do.
Update: This post has been corrected to show that Susan Collins was the Republican who voted for the measure, not Olympia Snowe. My apologies for the mistake.