The Buffett Rule: The Debate the White House Wants to Have

More

This past weekend, the White House floated a new principle called the "Buffett rule" that would require millionaires to pay a greater share of their income than the middle class. It's named after Warren Buffett, the billionaire investor who often makes the point that he pays a lower effective tax rate than his secretary. (Since he makes more of his income from tax-preferred investments than a typical salary, he pays a lower share of his overall income through payroll and individual income taxes.)

The Buffet Rule caused a stir online since conservatives complained that it represented class warfare -- as if reinforcing the contours of a progressive income tax were an act of war. Since President Obama did not mention it in his deficit speech this morning, it's fair to say the rule represents more of a guiding principle than a concrete policy measure.

But even as a guiding principle, it polls spectacularly well. More than 20 polls consulted by Bruce Bartlett reveal support for higher taxes in a deficit reduction deal, and the public prefers those higher taxes to disproportionately affect the rich. The White House can't run on a healthy recovery yet, and it won't run on spending cuts. The alternative is to turn 2012 into a referendum on the role of government and the responsibilities of the wealthy.

It's a clear choice. Republicans voted to voucherize Medicare and have refused to raise taxes. Democrats want to preserve Medicare and Social Security and have offered to pay for it by raising taxes on richer households. (I'd prefer a combination -- long-term entitlement reform and higher taxes for more than the top two percent, but the opening rounds of a negotiation are no time for open moderates.)

The Buffett Rule isn't a law so much as a foreshadowing. This is the debate the White House wants to have in the next year. This is the debate it thinks it can win.







Jump to comments
Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Get Today's Top Stories in Your Inbox (preview)

What Is the Greatest Story Ever Told?

A panel of storytellers share their favorite tales, from the Bible to Charlotte's Web.


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

The Death of Film

You'll never hear the whirring sound of a projector again.

Video

How to Hunt With Poison Darts

A Borneo hunter explains one of his tribe's oldest customs: the art of the blowpipe

Video

A Delightful, Pixar-Inspired Cartoon

An action figure and his reluctant sidekick trek across a kitchen in search of treasure.

Video

I Am an Undocumented Immigrant

"I look like a typical young American."

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Writers

Up
Down

More in Business

Just In