President Obama Buffett Tax On millionaires

"This is not class warfare, it's math," President Obama said in the Rose Garden on Monday while pitching his latest round of tax increases, the so-called Buffett Tax on millionaires. "Everyone -- including millionaires and billionaires -- has to pay their fair share," he said. But has Obama done the math on this? According to the latest data from the Tax Foundation, a nonpartisan research group in Washington, the top 1 percent of taxpayers made 20 percent of all income in the United States and paid 38 percent of all income taxes.
Meanwhile, the bottom 50 percent of taxpayers made 13 percent of all income and paid just 3 percent of all income taxes. Even more revealing is the fact that the top 5 percent earned 34.7 percent of the nation's gross adjusted income and paid nearly 60 percent of all federal individual income taxes. In short, our tax code is steeply progressive already.

Citing the "Buffet Rule" (after his best billionaire buddy, Warren Buffett, who thinks the rich don't pay enough in taxes), Obama said "that people making more than $1 million a year should not pay a smaller share of their income in taxes than middle-class families." But according to Tax Foundation data, the top 1 percent of earners paid an average rate of 23 percent in taxes on their income. Meanwhile, the bottom 50 percent of taxpayers paid an average of 2.6 percent on their earnings. So millionaires already pay a share of their income that is 10 times larger than half the population.

And here is some more math for Obama on taxes. The top 1 percent earned $1.685 trillion in 2008 and paid $392 billion in taxes. According to the Congressional Budget Office, our budget deficit was $1.294 trillion in 2010. If Obama wanted to balance the budget by taxing the rich, he would have to raise their effective tax rate from 23 percent to nearly 100 percent. And that's assuming any of them would still want to work -- or live in the United States -- knowing that Obama was going to take virtually everything they earned.

Thankfully, Obama has not proposed confiscating everything that "millionaires and billionaires" earn, at least not yet. After all, as he told NBC News' Chuck Todd in August 2009, "you don't raise taxes in a recession. ... We have not proposed a tax hike for the wealthy that would take effect in the middle of a recession." But a growing number of economists say that the U.S. economy is heading into another recession. Does Obama now believe that tax hikes on the wealthy are the answer for an economy teetering on the brink of a downturn?

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