I’ve heard people from both the left and the right call for simplifying our complicated tax code. So why does it seem like all the discussion these days is about making it even more complicated?
President Obama has been touting the “Buffet Rule,” which would require Americans who earn at least $1 million to pay a minimum income tax rate of 30%. The rates for regular wages are already higher than that, but since a lot of millionaires earn most of their money from investments, which is taxed at a lower rate, combined with a variety of other tax breaks, a lot of millionaires pay an overall rate lower than 30%. Thus, the hoopla about Warren Buffet paying a lower tax rate than his secretary. Thus, the “Buffet Rule.”
But apparently there aren’t too many millionaires cheating the system too badly, because the Buffet Rule is supposed to add less than $5 billion a year to government revenues (remember, we’ve been running deficits over $1 trillion – or $1,000 billion – for several years and are projected to do so for several more). As the Obama administration itself admits, this is less about reducing the deficit and more about the vague concept of tax “fairness.”
Continue reading Simplifying the Tax Code?