Obama’s ‘Buffett Rule’ could hinder US economic growth
In last week’s Budget Plan, President Obama announced that he is planning to increase the tax bite for better off Americans. But this, in my opinion, is bad policy and is likely to be detrimental to the US economy.
For the first time the White House counted revenue from the controversial “Buffett Rule,” which would require that households with annual income of more than $1 million pay a minimum 30 per cent tax rate.
However, the Buffett Rule is not, as it has been portrayed by the Obama administration, a tax that would affect exclusively ultra-high-net-worth individuals. It’s an attack on those aspiring to grow their wealth, an attack onmiddle America, an attack on success.
It’s a divisive policy that boils down to double taxation and one that is likely to damage theUSeconomy.
The amount of revenue that the Buffett Rule could raise, if any were raised at all, could be spent on senators’ ‘entertaining expenses’ over the next decade and scarcely be missed.
However, on the other hand, it would significantly reduce the available funds that investors in the private sector could use to launch or expand businesses and create jobs.
Taxing investments results in less of it. Lower investment means lower development, lower productivity and lower growth – and this would lead to a lower standard of living for Americans.
The Buffett Rule is not a serious solution to the important deficit issue.
Nigel Green deVere Group
Blog written 15th April