Most News Reports Don't Tell Readers or Viewers How Little Money 'Buffett Rule' or Even Obama's Tax Hikes Will Raise
A search at the Associated Press's national website on Warren Buffett's last name at about 5 p.m. ET returned two recent items which are still present there. Each item (here and here) mentions the Obama Fan of Omaha's idea to "impose a minimum tax of 30 percent on income between $1 million and $10 million, and a 35 percent rate for income above that." Neither mentions the pathetically small amount such a tax would raise while seriously impacting the ability of high income earners who own or run businesses to expand them -- or in some cases causing them to shrink.
It's the same at other establishment press outlets. Two recent New York Times items found in a search on Buffett's full name (here and here, the latter item being Buffett's own op-ed on Sunday) fail to note how little money Buffett's proposed tax hikes would raise. So how little is "little"?
Buffett hasn't been entirely consistent in his expressed suggestion. Earlier this year, he wanted a rate of 30%, while his recent Times op-ed suggests 35% for those earning over $10 million. James Pethokoukis estimated in April that the amount which would be raised would be about $5 billion -- "although experience suggests that it won’t raise even that much." The government currently spends $5 billion about every 12 hours, and runs an $5 billion deficit in less than two days.
Similarly, Congress's Joint Committee on Taxation estimated that the Buffett Rule would raise $47 billion over 10 years. Too bad that this 10-year amount, which again may be optimistic, is only about 5% of what is needed to close the realistically projected deficit the government will run in fiscal 2013 alone.
The press won't mention how little the Buffett Rule would raise, or for that matter how little letting the top income tax rate for people earning over $250,000 per year go to the Clinton Era's 39.6% would raise (less than $100 billion per year, or roughly 10% of this year's projected deficit) because it's embarrassing. Considering how badly the government is hemmorhaging cash day after day, it arguably costs more to talk about taxes than it does to instead spend time, energy, and effort where the problem is -- namely spending which is up well over 30% from 2007 levels with no meaningful positive impact on the economy as a whole or individuals' and families' pocketbooks.
But that's the point, isn't it? The people who want to avoid dealing the spending problem want to distract people with "soak the rich" taxes which don't solve anything and will probably hurt the economy. The press is disgracefully letting them.
Cross-posted at BizzyBlog.com.