When considering a lower tax rate we can make one of two assumptions. We can assume that changes to taxes rate will not change behavior, or we can assume that changes to tax rates do change behavior.
We know that...
The United States currently boasts the most progressive income tax in the industrialized world. Meaning, our wealthy pay a greater share of the tax burden than do the wealthy in any other capitalist nation. Yet in an August 14th New York Times op-ed, Warren Buffett called for even higher taxes on the rich in order to lower the federal deficit. He believes that he and his wealthy friends are under-taxed. However, Mr. Buffett's actions and the facts tell the real story.
Contrary to Mr. Buffett's and President Obama's perceptions, America's wealthiest taxpayers are paying a disproportionate share of the income tax burden. Before we ask the rich to pay more, perhaps we should ask those who are paying nothing to contribute at least something to the basic cost of government.
Of course, like any American, Mr. Buffett can voluntarily write a check or make an electronic payment to the Treasury to help reduce the deficit by simply clicking here. To be consistent with his message, however, he should resist taking the corresponding charitable donation deduction. This would at least ensure that he still pay those low income taxes of which he so passionately speaks.
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29 Democratic members of Congress from California today urged California to make its film tax credit more generous. A bill to do so, AB 1839, has passed the state Assembly and is pending in the Senate.