President Obama is making his "Buffett Rule" a central part of his re-election campaign. According to Obama's "Buffett Rule", Warren Buffett should pay a higher tax rate than his secretary. Currently, Mr. Buffett pays about 15% tax on his dividends and capital gains, while his secretary, who lacks dividends and cap gains, pays perhaps a 35% income tax on her last dollar of salary earnings.
Unfortunately, like most of Mr. Obama's statistics, this one is misleading. Worse still, his cynical bet that he can pedal this nonsense and ride it back into the oval office is, I fear, not really a long shot. With most Obama voters being either government dependents, government employees, the liberal professoriat, the liberal media, student dependents, artists, union members, or the uneducated, this kind of arcane taxation issue will never be understood.
The truth is, Mr. Buffett is actually paying about 45% total tax because his income is taxed twice. All dividends and capital gains are double taxed - once at the corporate level and once at the personal level. Moreover, this double taxation amounts to Taxation Without Representation. If one is taxed twice, shouldn't one be able to vote twice? Didn't we fight a revolution over this very concept? Isn't this what the original Tea Party was about?
I say Republicans should campaign on the "GE Rule". General Electric, President Obama's favorite corporation pays ZERO income taxes! That's right, one of the largest corporations in the US pays nothing. This is due to cozy relationships with lawmakers and effective lobbying efforts which have resulted in loopholes and kickbacks in all the right places. Smaller corporations could never afford that kind of influence and it represents everything that is wrong with the Crony Capitalism model favored by Obama and the Democrats.
I say, let every corporation pay ZERO income tax. Let everyone enjoy the "GE Rule". End corporate lobbying. End Taxation Without Representation. End double taxation on dividends and capital gains. And, finally, make the dividend and capital gains rates the same as the income tax at the individual level.
The GE Rule would satisfy the Buffett Rule, the Tea Party Rule, the Crony Capitalism problem, and the excessive lobbying problem. A Magic Bullet if ever there was one.
(Update: Check out GE Rule - Part 2)
