At the beginning of his presidency, Barack Obama argued that the country’s spiraling debt was largely the result of exploding health-care costs. That was true. He then said the cure for these exploding costs would be his health-care reform. That was not true.
It was obvious at the time that it could never be true. If government gives health insurance to 33 million uninsured, that costs. Costs a lot. There’s no free lunch.
Obama has made the case that the Buffet Rule, which would be the institution of a 30 percent minimum tax rates on those making over a million dollars, would bring about fairness for the American people and growth for the economy. His campaign pushed recently back specifically against the charge that the Buffet Rule was in any way directed towards deficit reduction. But even Obama himself argued way back last September that “[t]he money is going to have to come from someplace. And if we’re not willing to ask those who’ve done extraordinarily well to help America close the deficit ... that’s unacceptable to me.”
Here is how much revenue would be generated by the Buffet Rule:
The Joint Committee on Taxation estimates this new tax would yield between $4 billion and $5 billion a year. If we collect the Buffett tax for the next 250 years — a span longer than the life of this republic — it would not cover the Obama deficit for 2011 alone.
A primer on what the Buffet Rule actually does:
The reason Buffett and Mitt Romney pay roughly 15 percent in taxes is that their income is principally capital gains. The Buffett Rule is, in fact, a disguised tax hike on capital gains. But Obama prefers to present it as just an alternative minimum tax because 50 years of economic history show that raising the capital-gains tax backfires: It reduces federal revenues, while lowering the tax raises revenues.
And to answer Charles's rhetorical question if the President believes we are all this stupid to accept this with arms wide open, the answer is most definitely a yes.
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