The Fairness Fallacy Behind the Buffett Rule
NEW YORK ( TheStreet) -- The President of the United States has decided to take his traveling circus of illusion on the road to pitch his version of a Brave Fair World and the magic of his Buffet Tax that will make this all possible.
Every millionaire would be subject to the new rule and according to all the king's horses and all the king's men, "it will help us close our deficit." When the rule was first floated President Obama stated the tax "could raise enough money" so that we "stabilize our debt and deficits for the next decade." And he added, "This is not politics; this is math."
Now, I wasn't particularly a very good mathematics student, but I was most certainly not this bad.
However, on a different day in front of a different audience the president stated, "There are others who are saying: well this is just a gimmick. Just taxing millionaires and billionaires, just imposing the Buffet Rule, won't do enough to close the deficit. Well, I agree."
Meanwhile, back in the real world . . . according to the Congressional Budget Office the Buffet Tax will raise $3.2 billion per year. We currently borrow that amount every seventeen hours. So if we balance our budget tomorrow (insert laugh here) implement the Buffet Tax we can pay off our federal deficit in only 514 years!! To put this in perspective 514 years ago the toothbrush was invented, Columbus discovered Trinidad and Michelangelo was commissioned to carve the Pieta.
"Mr. Markowski, you idiot, it's about fairness! Don't you know that the rich need to pay their fair share!"
I would like to remind everyone that at least the president is consistent. Back in 2008, in a debate against Hillary Clinton moderated by Charles Gibson and George Stephanopoulos, then Senator Obama was pressed on what he would do with the capital gains tax. At the time Obama was considering bringing it up to 30%. Gibson explained to Obama during the debate that every time the capital gains tax was reduced revenue to the Treasury increased. Senator Obama could not be persuaded, he insisted that he would raise the tax because of fairness.
I decided to conduct a fairness test on my kids to see what the politically indisposed felt about fairness. I started with my youngest child, Nicholas who is six years old.
"Nicholas, if you and your friends wanted to buy a new toy, would it be fair if you had to pay for the entire thing and they had to pay nothing?" His answer, "No."