President Obama is hitting the road to renew his push for a “Buffett Rule” that would require taxpayers earning over $1,000,000 to pay an effective tax rate of at least 30%. The timing is no accident, as the Senate is poised to vote on the Buffett Rule on Monday.
In recent months — or at least since it was revealed that the Buffett Rule would put nary a dent in the federal deficit — the Obama administration has repositioned the rule as being in the interest of fairness, rather than a significant revenue generator.
But let’s call the Buffett Rule what it is: political posturing. It’s got no chance to pass the Republican led House, but it can still play a significant role in the November elections. Because — truth be told — the Buffett rule is a whole lot less about Warren Buffett than it is about President Obama’s chief competition come this fall, Mitt Romney.
It’s Romney, after all, who upon making public his tax returns in January, revealed that he paid an effective tax rate of a mere 13.9% on $21,600,000 in adjusted gross income. Now granted, Obama first announced his plans for a Buffett Rule in August of 2011, months before Romney’s admission, but the Obama administration is not populated with dummies, no matter what Rush Limbaugh might think. They had identified Romney as their most likely threat, and they knew that — as a man who made millions as a private equity fund manager — Romney was benefitting greatly from the preferential rates currently afforded investment income long before he released his returns.
When billionaire Warren Buffet famously announced that he pays a lower tax rate than his secretary, he did the president a tremendous favor. By handing Obama a poster child for his war against the perceived inequities of the current tax regime, Buffett allowed Obama to build a campaign against Mitt Romney without ever having to say Romney’s name.
If it hadn’t been made clear already, the president’s recent road show will tell the nation that the tax system is broken. Many people, both Democrat and Republican, will agree that a man earning $21,000,000 should not pay tax at a lower rate than a school teacher. They will view Mitt Romney as the enemy; the embodiment of this broken system, and many will find it difficult to relate to, and vote for him, come November.