Obama details "Buffett Rule," says millionaires should pay at least 30 percent tax rate
Billionaire investor Warren Buffett's secretary Debbie Bosanek sat in in First Lady Michelle Obama's box for the State of the Union addresss.
/ CBSIn his State of the Union speech on Tuesday evening, President Obama expanded on a tax plan he has been discussing for several months: the "Buffett Rule."
In his address, he called for people making more than $1 million per year to pay at least a 30 percent tax rate.
Taxes and tax rates have been a hot-button issue in recent years as a way to pay for an increase in government spending and a rising deficit and debt. And in recent days, tax rates have gotten even more attention due to the release of GOP presidential candidate Mitt Romney's tax returns which show he paid less than 14 percent in taxes on $21.7 million of income in 2010 because his income came from investments rather than a salary.
"Now, you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes?" Mr. Obama told the Congress. "Most Americans would call that common sense."
The idea was named after billionaire Warren Buffett after he pointed out that he pays a lower tax rate than his secretary because the capital gains tax on investment income is 15 percent, far less than the highest tax bracket of 35 percent. Buffett's secretary, Debbie Bosanek, was among First Lady Michelle Obama's guests for the State of the Union speech.
Obama's speech: Full text | Full Video
Mitch Daniels:Full text | Full Video
Video: Analysis with the CBS News political team
Full coverage: State of the Union 2012
A lot of attention has been placed in the last year on those making more than $1 million, but previously and during the 2008 presidential campaign, Mr. Obama called for couples making more than $250,000 per year to pay higher taxes. In his State of the Union speech, he left the door open by not providing specifics for those making between $250,000 and $1 million.
"If you make under $250,000 a year, like 98 percent of American families, your taxes shouldn't go up. You're the ones who need relief," the president said. "Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep our investments in everything else - like education and medical research; a strong military and care for our veterans?"
A CBS News/NYT poll released Tuesday shows that 52 percent of Americans think that investments should be taxed at the same rate as income.
But many Republicans in Congress disagree. House Speaker John Boehner reiterated his opposition to raising taxes.
"There's a reason we have low rates on capital gains," Boehner told reporters on Tuesday. "That's because it spurs new investment in our economy and allows capital to move more quickly."
State of the Union address 2012
Popular in Politics
- Obama forgets to salute while boarding Marine One Play Video
- The Ted Cruz conundrum
- Petraeus biographer regrets affair
- As summer approaches, sequestration threatens holiday fun
- IRS' Lerner was asked to resign, refused: GOP Sen. 200 Comments
- Senator: Oklahoma "hit hard, but we're not knocked out"
- GOP Rep.: Obama elected because of Reagan's immigration reforms
- Obama prom pictures surface
Buffett's income is mostly dividends and capital gains from stocks. If tax on this income were raised to 30 percent, many wealthy investors would put their money only in large, well-established companies and other low-risk investments.
That's because they'd likely view a 30-percent tax on dividends and capital gains as too high a price to pay for taking the risk of losing in the stock market.
Since small-company stocks pose the highest risk, small companies would suffer a loss of revenue. Ergo, a 30-percent tax rate on dividends and captial gains would hurt small business, the backbone of our economy, and increase the ranks of the unemployed.
President Obama knows all this. He's simply conducting class warfare for votes.
Audit of the Federal Reserve Reveals $16 Trillion in Secret Bailouts
The first ever GAO(Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill(HR1207), so that a complete audit would not be carried out. Ben Bernanke,Alan Greenspan,and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets. Nevertheless, the results of the first audit in the Federal Reserve's nearly 100 year history were posted on Senator Sander's webpage earlier this morning.What was revealed in the audit was startling:
$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland . From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world's banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious - the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.
To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is "only" $14.5 trillion. The budget that is being debated so heavily in Congress and the Senate is "only" $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.
"This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else." - Bernie Sanders (I-VT)
When you have conservative Republican stalwarts like Jim DeMint(R-SC) and Ron Paul(R-TX) as well as self identified Democratic socialists like Bernie Sanders all fighting against the Federal Reserve, you know that it is no longer an issue of Right versus Left. When you have every single member of the Republican Party in Congress and progressive Congressmen like Dennis Kucinich sponsoring a bill to audit the Federal Reserve, you realize that the Federal Reserve is an entity onto itself, which has no oversight and no accountability.
Americans should be swelled with anger and outrage at the abysmal state of affairs when an unelected group of bankers can create money out of thin air and give it out to megabanks and supercorporations like Halloween candy.
The list of institutions that received the most money from the Federal Reserve can be found on page 131 of the GAO Audit and are as follows..
Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America : $1.344 trillion ($1,344,000,000,000)
Barclays PLC ( United Kingdom ): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank ( Germany ): $354 billion ($354,000,000,000)
UBS ( Switzerland ): $287 billion ($287,000,000,000)
Credit Suisse ( Switzerland ): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland ( United Kingdom ): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)
and many many more including banks in Belgium of all places
View the 266-page GAO audit of the Federal Reserve(July 21st, 2011): http://www.scribd.com/doc/60553686/GAO-Fed-Investigation
Source: http://www.gao.gov/products/GAO-11-696
FULL PDF on GAO server: http://www.gao.gov/new.items/d11696.pdf
Senator Sander's Article: http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3
Unelected.org
....and so should the rest of working-America....the bonus would be an immediate BOOST to the economy !!!
Their contributions should not stop there. As we all know the government is not too good at administering the people's money.
So every millionaire or billionaire should donate five percent of their time and skills (and get five percent of their taxes back) to help administer the countries programs, especially Social Security and Health Insurance.
When you put many bright minds* together it has been proven that good things come out of it.
*Rich people who have inherited their millions are exempt unless they prove that they have new money making skills.
endrepubs: That happened to be one of President Obama's buddies that got away with that. After letting the CEO of GE get away with that, President Obama gave the man a position in his administration. Actually, GE got away with paying ZERO taxes on $5 billion in profits in the US. President Obama was really concerned about that, wasn't he? What a joke.
There are 30 Fortune 500 companies that earned a combined $160 BILLION in profits last year, that paid ZERO TAXES.
Obama is calling for fair and equal taxes across the board, the republicans think that the wealthy should pay NOTHING, and you blame those 30 companies getting a free ride on Obama?
What the hell are YOU smoking?
guess I missed that part.
It WAS the republicans!
Has anyone told this teleprompter in chief that the Bush tax cuts for the top 2% is only 70-80 billion a year? The deficit is 1.5 trillion! Do you think Obama will tell us where he is going to come up with the other 1.42 trillion?
The Bush Tax Cut extension added an additional $700 BILLION to the national debt each year, and it would have been $300 BILLION if the tax cut extension was just for those earning less than $250,000 per year as Obama wanted, but the republicans INSISTED that the tax cuts be extended for EVERYONE or else they were going to hold up the unemployment benefit extension.
And NOW you claim is that it's "only" $70 BILLION per year? Where did you get that figure?