President Obama speaking on Buffett Rule
In what will be the first salvo of the general election campaign, President Obama stumped for the Buffett Rule Tuesday in Florida, setting the state for a campaign that will focus on income inequality and basic fairness. The Buffett Rule would be a simple amendment to the tax code that would ensure that individuals making over $1 million in income per year would pay at least 30 percent of that in taxes. The Senate will vote on the bill next week.
The politics of it are a no-brainer, with Mitt Romney (mister 15 perent tax rate) as the Republican standard-bearer and the entire Republican party behind a budget that is a massive give-away to the wealthy.
Two administration economists, Deputy NEC Director Jason Furman and Council of Economic Adviser Chairman Alan Krueger, held a conference call with reporters on Monday laying the groundwork for today's speech and for the White House push on the Buffett Rule. Furman focused on the economic significance of passing the Buffett Rule now, saying that the $47 billion it's expected to raise over the next decade, "is actually a meaningful amount of money for us and most Americans,” that the Buffett Rule in itself isn't a plan to bring the deficit down, but to ensure the "basic principle of fairness" in the tax code.
The fairness part of the message truly is key, and is reinforced by this backgrounder [pdf] with some stunning statistics about who is making most of the money and who is paying for government in America:
Some of the statistics are eye-popping.
- "The typical CEO who used to earn about 30 times more than his or her workers now earns 110 times more."
- The 1 percent "takes home 17 percent of the total income earned by all American workers."
- Among those families making more $1 million/year in 2009, 1,470 of them paid no federal income tax.
- For the very richest, the top 0.1 percent of earners, the average federal tax rate has dropped a stunning 50 percent over the last 50 years to 26 percent, one-half the rate they would have paid in 1960.
- Of them, the 400 highest-income households (all over $110 million/year) paid just 18.1 percent of their income.
- Meanwhile, the middle class have seen their taxes roughly constant, or slightly increasing, over this period. The middle quintile, for example, paid 14 percent of its income in taxes in 1960 and 16 percent in 2010.
- Between 2000 and 2008, income tax rates for the top 0.1 percent fell by 4.7 percentage points.
That last point is a critical one, and good for the administration for keeping the focus on the Bush tax cuts. That's going to be the real battle, as the cuts are slated to expire at the end of this year. Fighting for the Buffett Rule now will help set the stage for a win on those tax cus. Because keeping a focus on income inequality and tax fairness now, and throughout the entire campaign, will help Obama and congressional Democrats win in November.