The Buffett Farce

Charles Krauthammer penned a nice piece on the president's latest policy proposal/poll-tested campaign gimmick, popularly known as the Buffett Rule. Appearing in The Washington Post, here's a snippet:

Let’s do the math. 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.

As an approach to our mountain of debt, the Buffett Rule is a farce. And yet Obama repeated the ridiculous claim again this week. “It will help us close our deficit.” Does he really think we’re that stupid?

Hence the fallback: The Buffett Rule is a first step in tax reform. On the contrary. It’s a substitute for tax reform, an evasion of tax reform. In three years, Obama hasn’t touched tax (or, for that matter, entitlement) reform, and clearly has no intention to. The Buffett Rule is nothing but a form of redistributionism that has vanishingly little to do with debt reduction and everything to do with reelection. ...

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 revenue, while lowering the tax raises revenue.