Monday, April 16, 2012

The idiotic Buffett rule and the noble Geithner rule

A detail often left out of the discussion of the President's so-called Buffett rule is that it is meant as a replacement for the Alternative Minimum Tax.  As such, the rule would actually reduce Federal tax revenue by $800 billion.

This transparent ploy to stir up resentment to get the President reelected began as the key to reducing the deficit and, when it came out that it would raise relatively little revenue, morphed into a simple matter of 'fairness'.  Now it comes out that it's just more proof of economic incompetence.

John Hinderaker proposes the Geithner rule, under which people actually pay the taxes they owe:
Start with the fact that as far as we know, Warren Buffett pays all the personal income taxes he owes, as do Mitt Romney and Barack Obama. Unlike these individuals, there are a great many Americans who don’t pay what they owe. The IRS estimates that year in and year out, around 15% of what Americans owe in taxes isn’t paid. This is mostly due to under-reporting of income. For FY 2011, the IRS collected around $2.3 trillion in tax revenue. Fifteen percent of that amount is $345 billion. Here, unlike the Buffett Rule, we are talking about real money.
Most tax evaders don’t wind up in prison. In fact, some wind up working for the government. Take Tim Geithner. Geithner, Obama’s Secretary of the Treasury, is a tax cheat.