When billionaire William Buffett announced that he paid a bigger tax rate than his secretary, the media gave major coverage to the news. Were the wealthy, following the Buffett example, going to rush forward to pay their "fair share" of taxes? A fat chance. (There was hardly any mention of the difference in "take home pay" between Buffett and his secretary.
For years, corporations and wealthy individuals have hired sharp tax lawyers to comb the 10,000 pages of the U.S. Tax Code for obscure regulations that could be exploited for their own financial advantage. Many of these obsolete tax rules later turned up as expensive earmarks that Congress approved of, as a token of collegial solidarity.
Democrats and Republicans have still failed to agree over what constitutes a fair, simplified tax code The G.O.P. still insists that a lower corporate tax rate would be good for the economy; they favor continuing the huge tax breaks of the Bush administration.
The Democrats want a generous tax increase from people who earn more than one million dollars annually to raise needed government revenue. It is unlikely that the tax issue will be resolved during the 2012 election year.
The Wealthy Are Offered Alternative Choices on Federal Taxes
President Barack Obama was so enthused by the Buffett announcement, that he mentioned it in his State of the Union address, and soon used it to develop his "Buffett rule," to encourage citizens with incomes of one million or more to agree to increase their taxes.
Wealthy Are Offered Alternative Tax Options
A proposal that would give the One Percenters two alternative choices in deciding how much taxes they should pay is incorporated in a bill being pushed by the White House. They could pay a minimum tax as they do now, with all the deductions, credits and loopholes intact. They would also calculate what 30 percent of their adjusted gross income amounts to. They would then pay whichever is larger.
By approaching the issue of "tax equity" in this manner, Congress would not have to tackle the difficult political task of closing each loophole. Nor could they be accused of inadvertently hitting other taxpayers, since only those with annual incomes of $1 million would be required to calculate the flat 30 percent rate.