‘Buffett Rule’ vs. Ryan plan: Who should chip in more?
By David A. Fahrenthold and David Nakamura,
The great moral debate of the 2012 campaign is turning out to be as inspiring as drunks arguing over a bar tab.
The basic argument is this: “Who’s not paying their fair share?”
Democrats have pointed the finger at millionaires, and this week, President Obama is pushing, again, for the “Buffett Rule” — which would require those who make more than $1 million per year to pay a bigger portion of the country’s taxes.
“They haven’t been asked to do their fair share,” Obama said at a White House news conference Wednesday, flanked by a group of so-called “Patriotic Millionaires.” “There’s something deeply wrong and irresponsible about that.”
Republicans have turned to people who use Medicare and Medicaid.
A new proposal from GOP budget guru Rep. Paul Ryan (Wis.), praised by presidential- nominee-to-be Mitt Romney, would shrink the government spending on these programs. People who use them would have to pay a greater share, to keep the programs solvent.
Either way, somebody pays more, but these passionate debates are unlikely to produce any detailed plan for fixing the deficit. Instead, both parties seem to be saying the first step is figuring out who has a moral duty to chip in more.
That’s the grim reality behind a campaign that will touch on taxes and spending, the role of government, and the country’s long-term fiscal health. It’s not as stirring as “Change We Can Believe In,” or “Morning in America.” But this isn’t that kind of year.
“It’s like the morning after in America,” as the country faces the grim choices left by a struggling economy and a yawning debt, said William Gale of the Tax Policy Center.
“The moral argument is: Who should bear the burden of the cost of government?” Gale said. “Ryan is moving the burden down the income spectrum. The Buffett plan is moving the burden up the income spectrum.”
Neither plan will fix the deficit problem anytime soon: The GOP’s proposal wouldn’t balance the budget until 2040. By itself, the Buffett Rule wouldn’t do it ever.
“People want to see tax fairness,” said Rep. Mazie K. Hirono (Hawaii), who is running for the Senate this fall. She was one of several Democratic Senate candidates campaigning on the rule this week. “People in our country, and in Hawaii, want to make sure . . . that they are not paying more in taxable rates than the richest people in our country.”
The Buffett Rule is named for billionaire Warren Buffett, who says that provisions in the tax code allow him to pay a lower tax rate than his secretary. A version of this idea, the Paying a Fair Share Act, is expected to be voted on Monday in the Democrat-controlled Senate.
It’s not expected to get the 60 votes needed. That’s not the point.
Even if it passed, the rule would not likely make a serious dent in the country’s deficit. It might add up to $162 billion over 10 years. The national debt grows fast enough to wipe that out within two months.
But that’s not the point, either. Instead, Democrats have framed the bill, and its expected defeat, as object lessons about a lack of economic fairness.
This is an extraordinary campaign-season message: Most candidates promise lower taxes. Democrats will promise higher ones. But only — they’ll say — on people who deserve them.
The Buffett Rule, Obama said Wednesday, would mean that “everybody has a fair shot. Everybody does their fair share. And everybody’s playing by the same rules.”
Politically, this might just be smart. In February, 72 percent of Americans in a Washington Post/ABC News poll said they supported raising taxes on people who make more than $1 million.
Or maybe it’s just not. In 2010, Washington state officials proposed their own “millionaire’s tax,” aimed at individuals making more than $200,000 a year. Supporters said it would apply to just the top 1.2 percent of taxpayers.
But 65 percent of voters turned out against it.
“Lost . . . In blue Washington state,” said Grover G. Norquist, president of Americans for Tax Reform, and Washington’s most prominent advocate for lower taxes. He said voters will see Obama’s promise as the prelude to higher taxes for all: “It’s the lie liberals tell when they’re going to screw you next.”
Republicans think they can win with a different, but equally grim, message. They agree: America needs somebody to stick with higher bills.
But they have a different way of choosing the stuck-ees.
“The President likes to use Warren Buffett and his secretary as an example of why we should raise taxes on the rich,” Ryan said in an e-mail. “Well, Warren Buffett gets the same health and retirement benefits from the government as his secretary.”
Ryan’s budget would revamp Medicare so that future recipients would pay more for the same kind of services. It would also shrink growth in spending on Medicaid and on food stamps.
All this wouldn’t balance the budget until 2040, estimates show. But Ryan says it would be a crucial change in the country’s spending habits, saving benefit programs that would otherwise become crushingly costly.
This year’s odd debate — about who to soak, and how to soak them — has surprised even Washington’s budget wonks.
“We have discovered,” said Michael D. Tanner of the libertarian CATO Institute, “we live in the land of limits.”
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