What Difference Does Obama’s “Buffett Rule” Make?

President Obama and Democrats have been talking up the Buffett Rule (a minimum 30% tax on people making over $1 million per year) for some time now. So what kind of difference does the Buffett Rule make?

I’ve seen revenue estimates between $30 billion and $40 billion over 10 years, but what kind of difference would that make in the scope of government finances?

Not too much.

79 thoughts on “What Difference Does Obama’s “Buffett Rule” Make?

  1. mark

    please ,,liberals wake up..you have a dishonest president here.this thug isn’t your daddy’s democrat.Its a STRAW MAN argument ,,figure it out..the one percent crap is a pimple on the ass of life yet it makes idiots without a clue get worked up about the so called “man” who screwed them just for being the “man”.the man taint keeping you down..your liberal policies are..

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  3. Pghdads

    What this graph and some of the below comments promoting this so called Buffet rule are the impact on the activities of the taxed millionaires by these additional taxes. They will not just out right pay them. Look at Warren Buffet himself; he has a $1BB tax liability outstanding since 2002 that he is contesting. In addition, these people will use or put their money somewhere else to avoid paying taxes. The deficit might even INCREASE if this Buffet rule is adopted. Maryland tried a similar tax on millionaires and their tax revenues DECREASED.

  4. Led Zep

    Start taxing welfare benefits as income and see there tune change. Since when does giving the government MORE money was a wise investment ! Do you actually believe they are going to use it for deficit reduction, HA !

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  7. TimEToy

    Some people are so ignorant. This is like having your house on fire and throwing a teaspoon of water on it. You cannot tax your way out of this because the problem is the government is spending too much money. Limit what the federal government does to what’s in the constitution and you could cut everyones taxes, at least the taxes of those of us that pay them, and still balance the budget.

  8. Dizzy

    Actually, it won’t decrease the deficit at all.

    Increasing the double taxation of corporate taxes will reduce the investments the rich make in corporations…thus costing more jobs, decreasing competition & innovation here in the US & reducing the corporate taxes the govt received. The money will instead go overseas or sit idle…not good for the US.

  9. James

    This is a presentation I just gave in front of my Business college class.

    The estimated amount of revenue from “Buffet Rule” tax on millionaires is $40,000,000,000 over 10 years or 4 billion dollars a year.

    For perspective, $40 billion dollars would be like winning the recent 656 million dollar Mega Millions Jackpot 60 times.

    That may seem like a lot, until you compare it to the size of our federal government.

    To understand how big some of these numbers are, this example is helpful:
    For 1 million seconds to pass by, it will take about 12 days. For 1 trillion seconds to pass by, it would take 32,000 years.

    Right now, our National Debt is over $15.64 trillion dollars and the National deficit is 1.3 trillion dollars.

    That means, the rate of increase in debt is $3.6 billion dollars a day, or 2.5 million dollars every minute.

    So from that information, you can calculate these facts:

    The number of days the “Buffet Rule” revenue could fund government: 1.11 days

    Annual Buffet Rule Revenue as a Percentage of National Debt: 0.0002558%

    Annual Buffet Rule Revenue as a Percentage of National Deficit: 0.003%

    Suppose you were the luckiest person in the world, and you won the record breaking Mega Millions Jackpot. Now suppose that you were also a very generous patriot who loved this country and decided to use that money to pay off the National Debt.

    Assuming that we had a balanced budget, and we were not going into debt at the rate of 2.5 million dollars a minute.

    To pay off our national debt you would have to hit that jackpot every day for the next 65 years.

    At current spending levels you would never pay it off and national debt would still rise over 1,000,000,000,000 a year.

    If you won the jackpot every day for just one year, that would make you 4 times as wealthy as the world’s richest man.

    So no matter how much you tax the rich, you will never pay off our national debt unless we address federal spending.

    Percentage of Federal Income Taxes paid by 47% of Americans: 0%
    Percentage of Federal Income Taxes paid by the top 1% of earners: 38%
    Percentage of Federal Income Taxes paid by the top 5% of earners: 58.7%
    Percentage of Federal Income Taxes paid by the top 25% of earners: 86.34%

    Current GDP to Debt Ratio is 103%. Worse than in the Great Depression.

    If you taxed everyone and everything at 100% you still wouldn’t pay off the national debt.

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  11. Sarah

    Actual solutions are not what President Obama is about. This graph should be in a political commercial with our President lauding the “Buffett” rule in the beginning, followed by the graph. Just the graph, no talking, long enough for people to see what nonsense this is. Maybe underneath the graph there could be a graphic saying “This administration’s lack of seriousness is off the charts.”

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  13. Stella

    Just sayng thank you to James…your paper should be required reading by every citizen who pays taxes.
    I hope you got an A++…even I can understand it…and I am not the brightest bulb in the room.(which I admit).

  14. Sam Skogstad, Dallas, TX

    For James: Great, and illuminating, set of numbers. I assume they are all correct. Still, one nit-picking and irrelevant (to the story) issue could make people doubt the story. It is: if GDP is 103 percent of Nat’l. Debt, then why would a tax of 100% of GDP not pay off the debt and leave 3% for feeding the (dead) masses?

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  16. Jim S.

    A agree that it will make barely a dent and could possibly hurt the economy and investments. I do think that we should not simply dismiss an idea because it makes too small of a cut as if we are going to get the beast under control it is going to take cuts of all sizes.

  17. Elisane

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  18. frost melon

    Do you know why it increases by such large increments? It’s because the administration spends in such large increments. So stop with the “yeah buts” and wake up and save your country!! This is America, our home, and we are leading it to a point of no return. If we don’t change things soon, the country we all love will be in eternal debt and our children will have to deal with it. And you know what makes it even worse, they can’t do or say anything about it.

  19. terry

    Probably the most concise direct explanation of our current situation that I have ever read. My only regret is that few will read it and fewer will pay attention to it.

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