Learn About The Buffett Rule

Learn About The Buffett Rule

Watch out for debate misdirection when it comes to taxes. Dr. Cornwall wants everyone to know that there will never be a tax increase on the extremely wealthy population (The Buffett Rule) that will put the tiniest dent in the tax shortfall of the United States.

So why is everyone so focused on the debate about making those who bring home over $250,000 a year pay more in taxes?

The answer is the Buffet Rule by President Obama. This Buffett Rule raises the taxes on a group of extremely wealthy people, but we hear that many of them would be glad to pay more in taxes.

We are also hearing that this group is about two percent of the population of taxpayers. In all honesty, they are about 1.8% of the population that pays taxes. They are over two and a half million people according to data provided by the IRS.

The deficit right now is $1.1 trillion. That is $440,000 for each wealthy household a year. There will not be any type of increase in taxes that can resolve this tax situation.

If you are wondering whom the two and half million super wealthy people are, according to surveys from the Spectrem Group up to twenty five percent of them are entrepreneurs. These professionals are the people we need to be expanding their businesses so that our economy can get better.

So why are political figures trying to soak the rich?

President Barack Obama and Warren Buffett in t...
President Barack Obama and Warren Buffett in the Oval Office, July 14, 2010. (Photo credit: Wikipedia)

I am a believer that this is just a set up for what we can expect in our future. This is just a way to get started on the real tax increase so that the masses will be more open to it.

There have been many talks about using a value added tax system for our tax burdens right now so that we can fund our federal government. It is surprising how little attention the press is paying to the VAT tax. What we are mostly hearing about is in regards to taxing the very wealthy.

The VAT tax has not been a favorite choice for Democrats because of it being such a flat tax. This European method is going to need to be covered if they decide to add it America’s tax system.

In the next few months, this is what I see happening…

There will be an agreement that the top marginal rates will have to be increased to at least where they were before the Bush tax cuts. This will be the Democratic cover.

After that, the VAT tax will be implemented. Republicans will be able to say that even if they did not want to raise our taxes, we should be happy that they did so by implementing a flatter tax system instead of huge increases in income tax rates.

When this happens, America will be facing an expanding government that has a new tax program for politicians to use however they see fit.

A Recent Poll Shows Popularity Of The Millionare Tax

Most people agree with President Obama’s plan to require millionaires to put a significant amount of their income toward their 2012 taxes. However, the same people would prefer to see a cut in spending rather than a millionaire tax to help balance the federal budget. These results come from an Associated Press-GfK Poll.

The survey shows that Obama’s millionaire tax plan has a lot of support. However, his plan has not changed people’s opinions on how to bring down the budget deficit. United States deficits have been larger than $1 trillion dollars a year. Sixty-five percent of the people polled agreed with President Obama’s plan to tax millionaires at a rate equal to 30 percent of their income. According to the poll, only 26 percent of those surveyed were against the idea.

Interestingly, 56 percent of those polled preferred spending cuts rather than hikes in 2012 taxes to fix the budget. Thirty-one percent of those polled preferred tax hikes. This same question was asked a year ago, and the response changed only slightly.

The poll further showed that the majority of people have a more favorable view of Democrats than they do of Republicans. This should be good news for President Obama as we enter election season. According to the poll, 54 percent of those surveyed gave the Democrats good ratings and 46 percent of those surveyed gave Republicans favorable ratings.

Although Obama has little chance of having his proposal passed by Congress during the campaign season, it serves as a Democratic rallying cry. It also shows a stark contrast between Democrats and Republicans who would like to lower the tax rate for millionaires. It will be interesting to see how these issues are approached during the election.