The ‘Buffett Rule’ Might Just be Politick
This election cycle, the Obama campaign seems to be emphasizing a policy called the “Buffett Rule” very heavily. This rule was precipitated by statements made by billionaire investor Warren Buffett expressing his displeasure that his tax rate was lower than that of middle class Americans. In this way, he advocates for high taxes for the rich. President Obama has characterized this policy as the rich paying their “fair share,” and it is supported by 60 percent of Americans, according to a recent Gallup poll.
This has led to what will likely be a showdown of epic proportions as the general election season begins: the fight about what is “equal,” what is “fair” and what, exactly, “class warfare” is. The debate in Washington is about the deficit and how to properly reduce it, and the question is how much of it should be through spending cuts and how much should be through tax increases.
President Obama has advocated spending cuts but has also suggested that they be coupled with modest tax increases (such as the Buffett Rule). The Republicans in Congress, who control the House and have a sizable, albeit minority, representation in the Senate, refuse to accept this. Most of them are signatories to a pledge administered by the group Americans for Tax Reform, in which they pledge to never raise taxes. President George H.W. Bush is the embodiment of what happens when that pledge is made and then not adhered to.
President Obama seems to be using the Buffett Rule as nothing more than a defiant way to attack this pledge. While Republicans cannot raise taxes under their pledge, President Obama wants to tout a popular bill to raise taxes and let the Republicans be on the losing end of a “class warfare” argument. In doing so, he can portray Republicans as pandering to the rich, and he can portray himself as a champion of the middle class. Considering that the Republican primary candidate Mitt Romney (R-Mass.) only pays an income tax rate of 15.3 percent, lower than that of a family that makes $50,000 a year, this sounds like an effective campaign tactic.
However, is this the way to win the election? Is this the Barack Obama who said that a president should be judged based not on his politics, but on his policies?
It does make sense that the rich, especially those who pay Romney-esque tax rates, should pay more in taxes. President Obama has been consistent in championing this in his insistence that the Bush tax cuts on the rich expire. However, the impact of the Buffett rule on the deficit is uncertain (estimates have ranged from $4.67 billion to $50 billion per year). With a deficit exceeding $1.3 trillion, does this even make a sufficiently large dent? Is this good policy or just good politics?
Obviously, the Buffett Rule should be a part of a larger deficit reduction negotiation, but when we have a 10-year projected deficit around $13 trillion and a Congress negotiating no more than $4 trillion in deficit cuts, can we really address this problem?
Every small victory is a victory toward returning to the budget surplus that we had only 11 years ago, but Congress needs to get serious. There is no way to cut taxes and fix this hole that we as a nation have gotten into. We need to stop subsidizing successful industries, stop spending money on military bases in nations that have not been our enemies since World War II, reform our entitlements, reprioritize domestically and, of course, raise taxes. Every one of these proposals will be opposed by one party or another, or one special interest or another.
But if Congress wants to be serious about reducing our deficit and returning to a path of fiscal responsibility, these are not even end-all solutions. They are just the first step. Politicians are really good at talking the talk.
Now is the time to walk the walk. The Buffett Rule is a step in the right direction, but let’s be honest and say that it’s a very tiny step not worth building a whole campaign around. This rule is more a political device than anything else, and it’s time that everyone from President Obama to the Republican leadership recognizes that their proposals are nothing more than token gestures, and that if either of them wants to act as the responsible one who will reduce the deficit, then they will have to do a lot better than that. It will involve working together, but it is necessary, and it’s time for Congress to do the people’s work.
Vijay Reddy is a College junior from Fayetteville, Ga.
By Vijay Reddy