Written By: Morgan Malone, Staff Writer
The story of Robin Hood is well known, take from the rich and give to the poor. President Barack Obama has recently made a proposal to the American people suggesting higher taxes for the upper-class. The proposal is being called the ‘Buffett Rule’.
Warren Buffett, billionaire investor, has complained that his tax rate is lower than the middle class who work under him and make $50,000 to $80,000 a year. In effect, Obama believes that by implementing his new proposal, the United States can benefit more in the long run by raising taxes on America’s wealthiest.
While Obama seems to have good intentions as far as taxing the rich is concerned, he doesn’t speak of lowering the middle class tax rate. The president’s plan totals over $2 trillion in deficit reduction over 10 years, however, middle class tax rates will still be the same and funding for vital programs such as Medicare, Medicaid, and social security will be cut.
While it is unlikely to be passed by his Republican counterparts, Obama’s proposal asks for $1.5 trillion in new revenue, the repeal of Bush-era tax rates, and $580 billion in cuts from benefit programs including Medicaid and Medicare. The proposal would also cut federal workers’ paychecks by 1.2 percent over three years in order to save the government $21 billion over ten years.
Simultaneously, 9.1 percent of Americans are unemployed; and Obama wants to appease the middle class workers by taxing the rich but has done nothing to alleviate the woes of the middle class
With support from the likes of Warren Buffett and Governor Andre Cuomo of New York, this proposal was a strategic move from his administration to help increase support for the upcoming presidential election. The Buffett rule may prove somewhat fruitful for the American deficit but is bad news for technological ventures.
Income from the rich generally comes from capital gains which is profit from the sale of an asset and stock. The ‘Buffett Rule’ guarantees that investors will have a lower return rate from their investments, will decrease the amount of capital available for early-stage investments, and lessen the comparative advantage of United States’ entrepreneurs to foreign counterparts.
While the Buffett Rule is not supported by the majority of Congress, the people who support this proposal must be wary that it will be a difficult battle before it passes. With such a heated rhetoric and polarizing Congress, new ideas and plans to help steer America on the right track should be welcomed and fully evaluated before more damage is done.
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With all due respects, income “from the rich” sometimes comes from interest income; much of it comes from a person’s — or a person’s business filed as an individual — earned income (taxed at a much higher rate than Mr. B’s secretary). And actually, Mr. B’s interest income is actually taxed TWICE, the first time when he made the initial money to invest; that’s why interest income is taxed at a lower rate. The mega-rich, like Buffett, do make more than enough from interest income to be sure, but there aren’t many of his ilk and not nearly enough to put a dent in our deficit spending now or liabilities coming in YOUR future. For one thing, as we found out in 2008, a lot of wealth can disappear very quickly, so you can’t really count on it. You have to control what you can directly control, and that is s-p-e-n-d-i-n-g.
obama I rob and take wealth from the greedy and give to the needy
vote for me!!!