Real tax reform better than Buffett Rule
The president is using tax season (and, let's be honest, the kickoff of election season) to push what he's calling the Buffett Rule, named after the "Oracle of Omaha," investor Warren Buffett. A better idea would be to come together with Republicans, stop relying on slogans, and enact real tax reform.
To give a refresher, the Buffett Rule was born when Buffett himself bemoaned the fact that he was paying a lower tax rate than his secretary, who obviously makes far less. While Buffett pays far more in dollar terms, as a percentage he pays less.
So does the president, we found out this week. And his likely opponent, Mitt Romney, pays a smaller percentage than the working poor.
How do they do this? Because income from wages is taxed at a higher rate than income from investments. Most Americans would agree we need both for our economy to succeed, but would probably put more value on income derived from work than income derived from investments.
While talk of the Buffett rule has drawn attention to tax inequality in the U.S., the reaction to it has drawn attention to the fact than half of Americans pay no federal income tax (certainly many of those pay payroll taxes, such as Social Security and Medicare.) We could generally agree that we don't expect kids or the elderly to pay federal income taxes, but there are still many able-bodied people who are paying nothing.
Who wins the argument? Both do. We need a tax code that requires those at the top to pay a reasonable rate -- in line with historical rates. And we need a code where everyone contributes, even if it's only a little, to making America work.
What we don't need is a complex code that gives special breaks to some but shifts the burden to others. We need something that's simple, clean and fair. In other words, we need the exact opposite of what we have now.
It's a sad world we live in when the IRS is going after waitresses for their tips but not General Electric for making billions in profits, and paying zero taxes. It's not right, and we know it's not.
The code is far too damaged to fix. It should be replaced with a new plan entirely -- one that taxes enough to meet our obligations but no more, one that treats everyone fairly but expects all to contribute something, and one that promotes growth and prosperity -- not one that gives special breaks to the interests with the best lobbyists.
We need to start over.
The Pioneer Journal editorial represents the collective voice of the paper's editorial board. Today's editorial was written by Steve Schulz, editor and publisher.