As one last note on the State of the Union Address I would like to show my support for the Buffett Rule. The Buffett Rule is a tax on millionaires to ensure they pay an effective tax rate of 30 percent. This is not an outrage or class warfare it just makes certain the wealthiest Americans pay their fair share in taxes.
Now, conservatives argue the wealthy already pay their fair share in taxes but they really don’t. First, the Buffett Rule does not technically raise any taxes on the wealthy. Those making a million dollars a year are supposed to have that income taxed at 35 percent. However, many of them do not pay near that much in taxes due to loopholes in the tax code and an unprecedented low capital gains rate. The current system gives the wealthy an incentive to make their taxes look like unearned income, like carried interest, to keep their taxes low. This is a benefit middle and low income families cannot reap. So it is not class warfare to ask millionaires to pay more in taxes.
Also tax rates for the super rich are currently at historical lows. During the first Clinton administration the effective tax rate for the 400 wealthiest Americans was 30 percent. Conservatives still want to argue raising taxes on millionaires will hurt the economy and slow job growth. However, in President Clinton’s first term 11.5 million jobs were created. Mr. Clinton increased job growth more than President Reagan who slashed tax rates for the wealthy and President Clinton created substantially more jobs than Bush did even in the good years of his administration. So the Buffett rule not only makes the wealthy pay their fair share but it could also boost the economy.