For the past few weeks it seems all we hear from President Obama and his White House team involve taxes and the issue of "fairness." It’s all centered around the so-called Buffett Rule, which would impart a minimum federal tax of 30 percent on those making more than $1 million per year. On Monday, the Senate basically squashed the billfrom moving forward. That was a mistake.
The president, his team and those on the left argue that higher taxes on the very top earners is the right and fair thing to do to help those less fortunate. The GOP and others on the right loudly counter that higher taxes on the millionaires will kill jobs and lessen our incentive to deploy capital in productive ways. It’s dominating nearly every press conference and political discussion since we’ve welcomed in the new year.
Both sides make fair points in their arguments. A few wealthy families will pay more and, yes, probably cut some spending. And though the total revenues would fund, at best, a few days of federal spending, at least it’s a little more than Uncle Sam had to begin with.
So who’s right?
The most destructive force of all the attention on the Buffett Rule isn’t in the merits of either argument but rather the argument itself. It is taking away the most valuable commodity of all: time. Time that Congress, the White House and American economic leaders could better use in working to solve the much larger problems we collectively face.
For example, while politicians and pundits spend countless hours discussing and debating a law that, at most, would raise tax revenues of less than 5 percent of our deficit, we’re ignoring:
- How to pay for the $1 trillion-plus worth of annual deficits we’ll face even if the Buffett Rule is passed.
- The creation of policies to actually grow the U.S. economy, stimulate job growth and get millions of people back to work, which would add hundreds of billions per year in added productivity, output and tax revenues as the economy improves.
- How to solve our terrifying obesity epidemic, which is costing taxpayers and the economy hundreds of billions of dollars per year in direct medical costs and lost productivity.
- How to keep more than 1 million high school kids from dropping out every year, which costs the economy hundreds of billions per year in economic and social costs.
- How to solve the massive amount of health care fraud in America, which is costing taxpayers more than $100 billion per year in erroneous and fraudulent payments.
- How to fix and pay for America’s crumbling transportation and energy infrastructure.
The list could go on, but it’s exhausting staring at these numbers. Add them up. Hundreds of billions, many times over. Instead of going after the big prey, politicians on both sides are setting mouse traps. Republicans in particular have fallen into a trap. Instead of pushing the president on the big issues, they’re letting him control the national political dialogue over a relatively small amount of total revenue. Cast as "millionaire defenders," the GOP has cut itself off at the knees with a huge chunk of America, many of whom may consider themselves conservative yet can understand the president’s position.
The GOP should work with Democrats, pass the bill and help America move forward.
Forget millionaires, billionaires and so-called no tax pledges. The real Buffett Rule bottom line is that all Americans are facing trillions of dollars in real problems while Congress dithers over petty cash.