A Different Buffett Rule - One That Would Work

Bruce Krasting's picture

The Senate torpedoed the Administration’s Buffet Rule.









This was a dumb piece of legislation. The joke was that it would have only raised $5b a year. That’s chump change. It never had a chance of passing. It was a show pony for the November election. Shame on Obama for making a circus out of what is (was) a necessary debate.

If I were running the show,  I would have proposed a tax that socked the top 5% for some additional money. I would have earmarked that extra tax money to pay a portion of the country’s annual Disability Insurance Fund (DI) benefit payments.

The Social Security Administration (SSA) started a program in 2008 called the Compassionate Allowance initiative.  Severely disabled people who qualified for the program - by being diagnosed with one of the listed diseases - could get expedited benefits, sometimes within weeks.

The list of severely disabling conditions covered by Compassionate Allowances (CAL) has been growing. It started with 50 conditions. In 2010, the SSA added another 38, and another 52 conditions will be added on August 13, 2012. (Link to all conditions)

Total DI benefits in 2011 were $130B. The number of beneficiaries increased by about 500,000 during the year. Of those, 60,000 were Compassionate Allowance cases. This data suggests that the CAL cost is approximately $20B a year. I want the top 5% to pay for this cost.

In 2009 the top 5% of income earners had income of $2.5 Trillion. There were seven million individuals in this income group. They paid a total of $507 billion in taxes. The average tax rate was 20.3%. The extra $20B for the CAL would raise their effective tax rate by a lousy 0.7%. In good years, where capital gains can be had, like 2010 and 2011, the cost to the rich folks would be an extra ½%.

I would like to hear one of those fat cats standup and oppose this plan. What would they say?

“It’s not fair! Just cause I made a Mil+ last year doesn’t mean I should pay more! I don’t care about those kids who get Neuroblastoma (#25) or Non-Hodgkin Lymphoma (#26). I shouldn’t have to pay for the fifty-year old who gets Gall Bladder Cancer (#49) and I don’t give a damn about those who have suffered Heart Transplant Graft Failure (#56)”

Same for the politicians. On what basis would they argue against this? I would love to see one of them try. They would get creamed in the next election if they did.

Folks with big incomes know that higher taxes are coming. If you asked this group if they favored a Buffett Rule that put more money in the government’s general coffers or a tax that was earmarked to pay for people with disabilities, they would point in the direction of my plan. It would make them “feel” better.


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undertheradar's picture

Ultimately I'd like to have a piece of the world where I was entirely self-sufficient and not bothered by anyone else. And there were no taxes. Any places like that have traditionally been overrun. What I'm trying to say is we have to come up with something a little more realistic. Hating government and spending may be a patriotic value to you, but reforming it and creating sensible rules, especially financial regulations, would work a lot better. The current system is going to collapse because the rich are hoarding so much wealth. Once the consumer market finally collapses, their capital or their money or both is going to loose relative value. We have to go the route of more self-sufficiency in the future, as individuals, as nations, etc. However, unless you are one of the top 5% you have no reason to go against taxing the rich to accomplish this. Go ahead and call me a socialist.

Zero Govt's picture

"The current system is going to collapse because the rich are hoarding so much wealth."

Wrong.... you don't know your history.

Subdivide a nation State into private productive people and non-productive parasites

What you will find as you go through each nations history and see their rise or demise is the balance shift between the two groups

Our Western world is currently dominated by parasites, the non-producitve class of Govt, banking and monopolists. Their growth is the ENTIRE REASON for our current economic destruction

You can go all the way 2,000 years to the Roman Empire and see how Rome collapsed (hint: over-taxation and debt-slavery)

undertheradar's picture

I also see that the civil service is the last to get cut in a crisis, because it is such an important ally when it comes to screwing the rest of the nation, wherever you go. And they are terribly cynical in the 'work' they do for their countries these days. In fact they realise they are responsible for keeping up the 'con' game of reassuring studies to knock down real reform and coming up with half solutions for previous crises instead of admitting to the crisis that is coming right at us. And they will also claim yet again that noone saw it coming. But that does not mean we should not tax the rich to avoid greater catastrophy.

Nukular Freedum's picture

Thats all cosmetic though. Some more comprehensive reform is needed to make the system sustainable, not tinkering around the edges of a 50000 page tax avoidance code. Think harder!


HD's picture

Bruce - you have a good heart. You ask "What would they say?" and here's my wild guess:

Yes, those with serious illnesses should be a priority - but such matters can only be truly addressed by eliminating the waste and corruption that the President defends with his big government, socialist policies. Demanding more job killing taxes is not the answer, but a symptom of out of control government spending. We need to work together by lowering rates and broadening the base to help all Americans.

All you will ever get is regurgitated talking points from these people. I wrote that from memory, and while not a quote - it might as well be. I'm as much a free market a guy as you will find, but when a society replaces real wage growth with easy credit and allows education and health care to become expensive luxury items - you have a recipe for disaster. The endless partisan politics just keep people distracted from the plutocrats picking their pockets. Doesn't matter who you vote for - they don't work for us.


lewy14's picture

"I would like to hear one of those fat cats standup and oppose this plan. What would they say?"

You don't have to be a Libertarian - hell, you don't have to be a fatcat - to observe that while greed is a sin, so is envy, and smug, self righteous vanity. All of which are conspicuously on display here.

This is nothing but a steaming heap of benevolence rage porn.

You would take money to do good - fine. No rad-lib, a priori, deontological ideology from me. We pay tax for collective well being and the relief of suffering, and those that can, should pay more. Great.

But nobody really believes these governing institutions of ours have any integrity or legitimacy left to credibly administer the benefits you'd like extended.

Who's been actively hacking away at the credibility of our elders and betters? Well, you, for instance. And rightly so!

Of course people will support the relief of suffering. Just don't insult everyone with insufferable righteous crap or you'll get it back in your teeth. I love your stuff Bruce but this is just incredibly hostile.

Your point seems to be that those who distrust the government to take their money and administer to the weak are somehow inhuman. This is punk's game and I don't buy in.

Zero Govt's picture

"I would have proposed a tax that socked the top 5% for some additional money."

Brucie Baby reveals his socialist nature. He steals other peoples money

"I would have earmarked that extra tax money to pay ..the country’s Disability Fund."

Brucie redistributes (other peoples) wealth

"Severely disabled people.. could get expedited benefits.."

Beats working for a living 

"The list of severely disabling conditions ..started with 50 conditions. In 2010.. added another 38, and another 52 conditions will be added.."

Whatever did they do before all this State largesse? Brucie's zombie army is tripling in size in a recession. No budget cuts here, socialism expands by moral decay (socialised theft), not by economic need

"Total DI benefits in 2011 were $130B... beneficiaries increased by about 500,000 during the year. I want the top 5% to pay for this cost."

You didn't ask, you said "socked"... it's called theft Brucie, give it its right name mate and yourself the right title for taking other peoples money

"I would like to hear one of those fat cats standup and oppose this plan. What would they say?"

Well they wouldn't say the nonsense you put in their mouths. 

How about let the "fat cats" (go-getters) distribute their own money to their own charitable causes as they see fit. That's fair isn't it?

If you want to help the disabled, do it off your own bat, not by obnoxiously getting on your high horse, robbing rich passers by and pretending you're on a moral crusade.

Thieving is thieving, whatever empty dirty moral label you put on it

"On what basis would they argue against this? I would love to see one of them try. "

Socialism has failed (miserably). It has failed in every country throughout history to a point in brings most nations still on it to their knees impoverishing everyone (including the disabled). 

Redestribution of others wealth does not work Brucie, go do some hard research you whining baby

"Folks with big incomes know that higher taxes are coming."

Yes precisely why the economy has little investment, a stagnating enterprise culture and zero green shoots of recovery. Taxes kill jobs, economies, charity

"It would make them “feel” better."

Knowing you are coming their way waving your disability banner and a gun to rob them with?

You are off your tiny rocker Krasting, get a life mate, not steal someone elses

Bruce Krasting's picture

DI is paid by all 155 million workers today. I want a portion of that cost to be paid by just the top 5%. If that makes me a socialist, then I'm a socialist.

Bennie Noakes's picture

I'm sure it must make you feel really generous donating other people's hard-earned money to the charity of your choice.

I hope someone robs your house. After all, they probably need the money more than a greedy speculator like yourself.


Zero Govt's picture

You are a socialist (thief)

you want to pick other peoples pockets to donate to your favourite cause.. rather than stealing other peoples money (haven't the Govt pisse away enough for you?) why not get off your own arse and stump up the money, or start a charity giving people a free choice, rather than your obnoxious State theft

redestributing other peoples money doesn't work, in fact it leaves whole nations completely broke.. what part of double-dumb don't you get?

Nukular Freedum's picture

Your out your depth here bruce.

theprofromdover's picture

I think it might work a whole lot better if government just spent less, and stripped out the multi layers of interference, waste and pork.

If they cut out the corporate and financial sector tax-breaks, they wouldn't need to raise %age taxes on the rich.

Taxes could go down for everyone, starting at the bottom.

Walt D.'s picture

You don't give an alcoholic another case of booze just because he is thirsty.

SAT 800's picture

The day the government proves it can do better than I can to allocate my money, I'll vote for taxes. Until then, remember that Andrew Carnegie paid for the library in your town; in everyones town; and not the government. Think about it.

Clowns on Acid's picture

Bruce - is this column a satire?

Zero Govt's picture

alot more socialism (theft) than satire

Bruce has designs on other peoples money and he thinks he can spend it better than them and on more worthy charities

Bruce has put himself on a pedastal (above everyone else in society), the same rotten plinth all politicians mount themselves on

Augustus's picture

If "We All Know that We ALL Need this Benefit",


Let "We All" get in the game of paying for it.  It is what the Alternative Minimum Tax should be.  Everyone pays SOMETHING, and FICA does not count.  Or count FICA and also count my Pension Plan contribution.

John_Coltrane's picture

A simple observation Bruce:  life isn't "fair" so get used to it.

DeadFred's picture

My back of envelope calcs say it's 5 days of deficit spending. Kinda like dieting by takeing the chocolate sprinkles off your banana split.

SAT 800's picture

five minutes after it was legislated to pay for disability it would turn out that we really, really, needed ultrasonically guided anti-terrorist missiles; and there you would be. Right where you are now; run over and used like a condom by the military-industrial complex.

robdashu's picture

Claw back. Drop from helos on Main St.

lasvegaspersona's picture

not a problem, Obama care will answer all prayers...who needs yet another well intentioned tax? As a doc I'm amazed by what gets declared disabled. It has a lot to do with connections and not so much to do with illness.

An example of abuse is autism. Autism is a horrible problem, I had a friend with an autistic child and in many ways your life is forever altered with such a child.

When large funding became available to help care for these kids however the diagnosis exploded. Mildly asocial children would be awarded 8 to 12 hours a day of nursing care and babysitting at a high level. I am not an expert in this area so please do not take my word as final but it seems to me that there has been some abuse of the system in this area. It would not surprise me to see an increase in rare diseases on such a list.

barliman's picture



How have you fallen to the point of making strawman arguments a la Obambi?

YOU concur with an premise that has no basis in fact - the wealthy neeed to pay more to MAKE LIFE MORE FAIR. 

Europe has already tried EVERYTHING along these lines over the last 70 years.  NONE of them worked.

In European countries, being a chronic alcoholic who does no work becomes a guarantee you can't be fired for poor performance BECAUSE you are an alcoholic and your employer is required to FIX YOU rather than terminate you.

One Krugman in the world is enough. Try to find a new line of reasoning or approval from a different group of friends. Your geo-sociological prejudices are showing.


OpenThePodBayDoorHAL's picture

Samuel Johnson said a society is judged by how it treats its least fortunate. Clearly our society has treated its most fortunate very well, Mitt can lay off thousands, leverage pension assets to buy out shareholders, and hide the  money in Switzerland and the Caymans and pay lower taxes than if it was ordinary income. He's fine, even if his wife did say "I don't consider myself wealthy" (I guess it's hard to squeeze by on just $350 million these days). It used to be the case that the majority of Americans were fine, too. Jobs, health care, retirement were all fairly sure things. Not so any more. 1 1/2 million homeless children, now there are some unfortunate souls.

The problem with the 1% taking more and more of the pie and then retreating into their gated communities is that eventually the 99% get fed up and grab a pitchfork. Read a history book or two if you don't believe it.

barliman's picture


Oh goodie!!!!

A Samuel Johnson quoting, bleeding heart, OWS sympathising liberal who can orally defecate the place with talking points and verbal barbs as dull as dishwater.

I've read a good number of history books, some in other languages even! If you study history without a preconceived agenda you will learn that revolutions are not started by the oppressed masses rising up with pitchforks ... they are started by growing economic groups dissatisfied with the status quo (let's keep it simple for you - No taxation without representation) but this applies even unto this very day.

[Spoiler alert: Fall of communism - driven by the failure of the economy to be able to deliver the most rudimentary necessities on a reliable basis. This sapped the effectiveness of the police state when even the "privileged elite of the party" were struggling to get by and found working full time in the black market was more profitable than worrying about oppressing the civilians. Egypt last year - single largest media clusterfuck ever praising a 'peoples revolution' while one of their own gets gang raped thirty yards away - and it turns out the Muslim Brotherhood had the inside line on the eventual outcome.   Russia today - the Mafia concept applied to an entire country.      Ahhh, but I digress.]

Let's insert Bob Sacamano's excellent point:

2007 revenues $2.5 trillion & spending $2.7 trillion; 2012 revenues $2.5 trillion & spending $3.6 trillion. There is no tax revenue problem, there is a massive spending problem.

How can it be the Obambi administration is spending ~ $ 1,000,000,000,000,000.00 more than 5 years ago and we have "1 1/2 million homeless children" ???

Oh, yeah - Obama could give a shit just like all the other politicians in Washington

I'd like to give you the benefit of the doubt and presume you are just an arrogant, self-satisfied liberal schmuck undeterred by factual information in your inhumane devotion to your political ideology  but ...

... your comment indicts you as criminally stupid - and you just can't fix stupid.


Zero Govt's picture

well said barliman

2007 revenues $2.5 trillion & spending $2.7 trillion;

2012 revenues $2.5 trillion & spending $3.6 trillion.

There is no tax revenue problem, there is a massive spending problem.

100% correct... but socialists like Krasting just want "more, more, more" of other peoples money until there's less for all (national bankruptcy)

Bob Sacamano's picture

a. It is not possible to "earmark" revenues for a specific use -- see Social Security.

b. 100% certain there is an easy $20 billion of spending cuts available to fund this.

c. 2007 revenues $2.5 trillion & spending $2.7 trillion;   2012 revenues $2.5 trillion & spending $3.6 trillion.  There is no tax revenue problem, there is a massive spending problem. 

cdskiller's picture

Bruce, you are so darn timid! You propose raising taxes on the top 5% of earners by .7% or, egad!, 1.2%, and still you get eviscerated in the comments. You are dealing with absolutists, my friend. If you are going to get killed here, anyway, propose what really needs to happen: the top marginal tax rate needs to be raised to 75%, or more. We have to claw back and reduce the wealth gap if the country is to survive. If selfish, deluded, unpatriotic people don't like it, they are free to leave. 

Edmon Plume's picture

So, what happens if the selfish, deluded, unpatriotic people are the same as those on whom the marginal tax rate becomes 75% or more?

booboo's picture

more feel good horseshit hokum. I have an idea, how about the 47% that pay no fed income tax pony up some "patriotism" or decide what level of government they can afford. Maybe after that they to will see that they are firing bb's at battleships.


booboo's picture

How about you stop volunteering dumb ideas on how to steal more of OP money.

Charity still starts at home and I can decide what is the best use of my money.

If you are so moved, United Way, or thousands more. The Federal Gooberment? HA! Black Hole.

Mercury's picture

Bruce, your usual sharp-pencil analysis isn't much in evidence here.

This is the kind of thing that municipal governments trot out every year and it's getting old with voters: bloat the government with all kinds of community outreach facilitators, diversity councelors and make-work projects and then tell voters that firemen and teachers are on the chopping block if you don't override prop 2 1/2 in November.  Charred bodies! The children!

The problem is: what starts out as a well intentioned program to buy puppies for kids with cancer inevitably grows into an entitlement to free puppies for everyone. If your plan works....then what? - the government will stop there and not recycle the same emotional appeal to target another group of taxpayers next year (and still not shrink government)?  I doubt it. 

If CAL starts getting serious funding it will be expanded to cover left-handedness and crooked tits in like six months, guaranteed. Plus, the percentage of CAL tax monies that actually make it to the disabled will shrink as a whole new bureaucracy springs up around this new cash stream.

Maybe the political class should pay a special tax for CAL in exchange for having exempted themselves from Obamacare.  I bet that would get a bang on the ballot.

I'm sure there are many, many government programs far less deserving of taxpayer monies than CAL.  How about we identify one or two, close them down and redirect their funds?  With this kind of good faith effort you might get more broad based support for tax raising plans generally and otherwise foster the impression that the government isn't just in business for itself.

At least my simple plan is original.

ghostfaceinvestah's picture

You can be sure the disabled benefits are being abused.

Push that and many other programs to the state/local level where there will be less waste.

Central Planning never works, ever.

Oldwood's picture

so many are convinced that the worlds problems must be solved by government spending. If Warren thought higher taxes for the rich were the answer, why has he put vastly more of his money into private charities that he can administer? If you insist on income taxes, then make all income including capital gains, taxed the same....except all income is to be taxed based on inflation adjustment. Regardless of rich or poor, there is nothing fair about paying taxes on gains that in many cases are completely derived from inflation. Especially when inflation is deliberately created by the taxing entity.

Zero Govt's picture

the answer is not more tax or less tax, the answer is Zero Tax

Govt is the problem, not the solution.. so don't feed the sucker

Thunder_Downunder's picture

Bruce, you make too much sense which is why you'd never make it in politics :P


The state of US politics is extremely sad... if mainly because congress is teaching the rest of the developed world how work over the peasants. Politicians around the globe look at your guys with puppy dog eyes, hoping that if they follow suit they might get an invite to shwanky party, or UN appointment...



One eyed man's picture

Bruce, you are either an idiot or a stooge for the government. Every time the Congress creates a tax on the rich, it soon gets pushed down to the middle class. Plus, Congress hides dozens of new tax loopholes in the same bill so that the super-rich actually end up paying less.

Remember how the AMT was supposed to insure that the rich pay their fair share. Now it mainly affects the middle class.


Widowmaker's picture

You're both blind - abolish the insanity known as the "income tax" altogether.

Careless Whisper's picture

If I were running the show,  I would have proposed a tax that socked the top 5% for some additional money.

Oh really. Well if I were running the show I would cut spending by 1 trillion, like Ron Paul proposes. I would also push for a constitutional amendment to eliminate (repeal) the income tax and replace it with a sales tax. Isn't it simply outrageous that a tax is imposed on a person's labor? I find that repulsive.



been there done that's picture

You know what else totally sucks. Paying tax on buying a USED car. Who ever came up with that shit. Tax was paid when it was new. Most everyone gets around it by writing their own receipt anyway but WTF. 

LowProfile's picture

This is our MAIN problem, that everybody thinks someone should be "running the show".  As if one person could set the agenda for 300 million people (or even 7 billion?!).

Why not leave every community, to run their own show?  Then we can all seek out or form communities who's "show" we like.  I only like Paul because he would take great strides in that direction, more so than any other candidate, except perhaps Gary Johnson.

Sick and tired of people who think it's OK to push other people around "for their own good" because "they know better", and people who think it can be "fixed, if we just get the right people running it."

Almost Solvent's picture

Maple Syrup Urine Disease

undertheradar's picture

From Liberation: Europe 1945


It was not uncommon in the winter of 1944 to see Dutch children like this twelve-year-old girl fighting over the trash pails where the GIs threw their uneaten rations, or offering sex in exchange for food. And in the spring the of 1945, the picture in the Netherlands only worsened. The Allied armies that had dashed through northern Fance and Belgium in August arrived on Holland's doorstep in early September, but then failed to drive the Germans out of the country. Only a small slice of southern Holland was freed from German control, and the rest of the country, including the main cities of Amsterdam, the Hague, and Rotterdam, remained under occupation until the end of the war. Although the Allied armies periodically launched attacks on the German lines in Holland - the First Canadian Army fought bitterly there - the ugly truth is that the liberation of northwestern Holland was simply not a strategic priority for the Allies. The Anglo-American armies hit the Germans along the Siegfried Line in Belgium and France, and in spring 1945 pushed eastward into Germany proper. This left a large contingent of German soldiers effectively cut off in Holland, though still in command of much of the country. A gruesome sideshow ensued: the doomed German occupiers pursued a policy of vengeance against the citizens of the Netherlands, and deliberately allowed them to starve.

During the late winter and early spring of 1945, when life had revived in liberated Brussels and Paris, northwest Holland was a lifeless zone of darkness and hunger, a pitiful encampment of skeletal children and cadaverous people, surviving on tulip bulbs and beets. The Dutch people's deliverance did not come until the collapse of the Third Reich itself, by which time some 16,000 people had died of starvation in what had been one of the richest, most intensively cultivated countries in Europe. When the Canadian and British troops did finally enter the main cities in early May, they were of course greeted warmly, and many soldiers thought at first glance that the Dutch people seemed to have survived on their meager rations. But that was because the desperately ill were not among the crowds. As Major-General J.G.W. Clark, the head of the SHAEF mission in the Netherlands, put it tartly in a memo to London, "men and women who are slowly dying in their beds of starvation unfortunately cannot walk gaily about the streets waving flags."


So I can appreciate humour here, but don't forget history. And if you think the 101 Airborne was the only meaningful liberator in the Netherlands, because of the movies you've seen, think again. We remember.

Because Rome collapsed completely after the barbarian invasions. And it may yet be necessary to purge the current corrupt system by attacking its heart, with a massive coalition. I'm not saying its going to happen tomorrow. But this is a reminder of that smugness. An attitude of "we'll have to fight the rest of the world because they don't share our values" is a double edged sword.

SokPOTUS's picture

You don't want it on your pancakes...