Over the last couple of days the President has been touting his “Buffett Rule” with a focus on fairness to tackle our country’s massive deficits. BankruptingAmerica.org has released a tax infographic – a visual breakdown of the tax brackets, a look a the “Buffett Rule,” a breakdown of where your tax money is spent and more.
Will increasing taxes save us from bankruptcy? Take a look at the graphic below. Mouse over to magnify.
Are taxes the ticket? See the analysis below of Obama’s proposed “Buffet Rule”:
For years the U.S. has had an unfortunate habit of spending far more than we can afford, sending us trillions into debt. Some have suggested we should tax our way out of it. Before Tax Day 2012, we go beyond the question of whether we should, and ask a more important question: can we?
Are Taxes Enough?
In 2008, the independent Congressional Budget Office was asked to determine what the tax rates would have to be if they used “higher income tax rates alone to finance the increases in spending projected.”1This was the last time the CBO did such an analysis.
Here is what the CBO determined at the time:
In order to keep up with projected spending, taxes would have to increase:
- Corporate: current top rate 35%; rate increase to 88%
- Highest income tax rate: current rate 35%; rate increase to 88%
- Near-the-middle income tax rate: current rate 25%; rate increase to 63%
- Lowest income tax rate: current rate 10%; rate increase to 25%
What is the “Buffett Rule” Tax?
Recently, President Obama has called for fairness in the tax code. The president says one way to do this is to enact the so-called “Buffett Rule.” Under this proposal, wealthy Americans would pay a minimum tax rate of 30 percent. One reason some wealthy Americans can pay a lower tax rate is because investment income is taxed at a lower tax rate than ordinary income.3
- According to analysis, however, the proposed tax would do almost nothing in terms of deficit reduction. Congress’ independent tax analysis arm, the Joint Committee on Taxation, determined this proposed tax would raise just $47 billion over the next 10 years. 4 When looking at the non-partisan Congressional Budget Office’s projected debt over the next decade of $21.665 trillion, $47 billion represents 0.2 percent in deficit reduction.
The facts show that this proposed tax would do almost nothing in terms of deficit reduction.
Finally, here is the link to a cool, “tax briefing booklet” prepared by the Public Notice.
We have two extra days to get our taxes in this year, deadline is April 17.