December 22, 2014

'Class Warfare' or Just Math?

  • The national debt has grown significantly in recent years due to rising annual deficits. A deficit occurs in any year the government spends more...

The tax proposals in President Obama’s latest deficit-reduction plan have led to partisan charges and counter-charges of “class warfare.” Journalist have focused heavily on his proposed “Buffett Rule,” which Obama says would ensure that people like Omaha billionaire Warren Buffett would not be taxed at lower rates than people with lower incomes.

Alice Rivlin, a senior fellow at the Brookings Institution, and Robert L. Bixby, executive director of The Concord Coalition, offer their analyses of these issues on The American Square website.

Rivlin expresses concern that “average incomes have stagnated while incomes of the very well-healed have sky-rocketed” in recent years.  She considers the Buffett Rule “largely symbolic” and believes a better approach “would be to blow up the tax code and start over, getting rid of almost all special provisions . . .  and taxing all income at the same rate.”

In commenting on Rivlin’s blog post, Bixby agrees that substantial changes in the tax system should be made. He writes that given the concentration of wealth at the top of the income scale, the tax advantages many of the wealthy enjoy and the country’s fiscal problems, “Obama’s call for the wealthy to pay more in taxes should not be dismissed as mere ‘class warfare.’ "

But Bixby also thinks too much attention has been devoted to the Buffett Rule, a focus that “undermines Obama’s call for shared sacrifice because in the end we’ll have to do more than just raises taxes on Warren Buffett and his peers.”