Obama's "Millionaire Tax" Collected Over Next Ten Years Will Plug 4 Months Worth Of Deficit

Tyler Durden's picture

In order to keep the ongoing class warfare waged by the administration in perspective, today the CBO was kind enough to score the revenue impact of the proposed and much debated Buffett Tax, now appearing in non-populist literature as "Surtax on Millionaires." According to the Budget Office, said tax which is the source of substantial consternation among the population, would generate, over the next decade, a grand total of... drum roll... $453 billion. Why the drum roll? Because as we pointed out a few days ago, the US closed the 2011 fiscal year having added $1.23 trillion in debt (a number which would have been $1.4 trillion absent some year end settlement gimmickry). In other words, last year the US government had on average a $100+ billion deficit each month. In yet more other words, the great populist gimmick that is the Buffett Tax will have the great benefit of generating, between 2011 and 2021 enough money to plug a debt hole, at the rate America currently spends money, of 4 months.

From the CBO:

Dear Mr. Leader:

 

As you requested, CBO and the staff of the Joint Committee on Taxation (JCT) have estimated the budget impact of S. 1660, the American Jobs Act of 2011, as introduced in the Senate on October 5, 2011. CBO and JCT estimate that, in total, enacting S. 1660 would decrease deficits by about $6 billion over the 2012-2021 period (see enclosed table). That estimated deficit reduction of $6 billion over the coming decade is the net effect of $447 billion in additional spending and tax cuts in titles II through III and $453 billion in additional tax revenue from the surtax specified in title IV.

 

S. 1660 is similar to S. 1549, the American Jobs Act of 2011, as introduced in the Senate on September 13, 2011. Provisions in title I, II, and III related to both federal revenues and spending are identical for the two bills. The only difference between the bills is that S. 1660 replaces the provisions in title IV (Offsets) of S. 1549 with a surtax of 5.6 percent, starting in 2013, on a taxpayer’s modified adjusted gross income in excess of $1 million (or $500,000 in the case of a married individual filing a separate return), indexed for inflation. JCT estimates that title IV of S. 1660 would increase revenues by $453 billion over  the 2012-2021 period, whereas title IV of S. 1549 would increase revenues by $450 billion over that period.

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legal eagle's picture

Hmm, if we only had more millionaires.

Cynical Sidney's picture

This new plan isn't a tax hike, it only gives the appearance that the rich will be taxed more.

the corporatocracy got us where we are by privatizing wealth while nationalizing debt. we might have to reverse the trend by nationalizing all wealth to settle their bad debts. another alternative would be debt relief, however other nations will war us if our rich do not give up a good portion of their wealth.

 

CrazyCooter's picture

I pretty much assumed we are all millionaires in the not too distant future ...

These clever bastards are going to jack rates on "millionaires" and then print the dollar into oblivion insuring the ranks of "millionares" swells with "middle class". Gas will be 40 bucks a gallon, milk will be 50 bucks a gallon, etc, etc.

Regards,

Cooter

redpill's picture

Makes you want to quit your $1 million salary job and become a paid protester, I say!

 

http://dailycaller.com/2011/10/06/organizer-admits-to-paying-occupy-dc-protesters-video/

 

jekyll island's picture

That's too funny.  I love the commenter who said "There go the Mexicans again taking the jobs Americans don't want to do"

Harlequin001's picture

Governments the world over just don't seem to 'get it' that there is too  much tax. Most people I know don't mind paying some tax, they know they need to be protected by police, they wish to be able to call a fire brigade when their home is on fire, but 50%+ to bail out banks and pay welfare. No way.

The overall tax rate needs to drop to between 10 and 20%, no more...

fuu's picture

Do the richest persons in the country actually pay their fair share of taxes? I seem to recall reading a lot of articles about XOM, BAC, GE, CVX, BA, VLO, GS, C, COP, CCL not paying very much in terms of totals or rates.

yakmerchant's picture

Yeah I had dinner with Mr. XOM last week and he said he's not paying very much.  

nickt1y's picture

If you used some logic you wold realize that corporate taxes are just another way of taxing yourself. The taxes are rolled into the price of what you buy! TNSAAFL, remember that and all the socialist ideas fall apart.

bigdumbnugly's picture

the master plan would be not getting it implemented until august 2012 and carrying it through to november.  things will look so rosy.

fuu's picture

It's all taxing ourselves. As long as we are taxing income on the personal level I think we should tax at the corporate level.

Progressive corporate taxation based on head count. Larger corporations with 10,000 employees and the cash flow to influence national policy should be taxed much more than a small business that employees 5. Big companies are not the engine for job growth or systemic growth. They represent the apex of their markets and are the culprits more often than not of all the poor behavioral choices we read about here at ZH. They are unhealthy, they distort markets and price discovery. 

Just my opinion though.

eureka's picture

fuu - I agree with you - I think your opinion is spot on

and as for "enough money to plug a debt hole, at the rate America currently spends money, of 4 months"... OH, HAHAHA, HOW FUNNY - SO WE SHOULDN'T DO ANYTHING ? 

A MILLIONAIRE TAX CERTAINLY BETTER THAN DOING NOTHING - BETTER THAN LETTING THE ELITE KEEP LOOTING THE PEOPLE - ADD TO THAT DISMANTLEMENT OF US EMPIRE PLUS TAX CHINESE IMPORTS AND MAYBE - JUST MAYBE US WILL HAVE A RENAISSANCE OF SORTS - A RETURN OF MANUFACTURING AND ENERGY INDEPENDENCE AND NEAR FULL EMPLOYMENT AS PRIORITIES.

REMEMBER: FINANCIALIZATIO/GLOBALIZATION IS FOR & OF & BY THE ELITE.

Don Smith's picture

THe point is NOT that we shouldn't do anything, but rather that this is being touted like it will solve the problem.  

The real issue is tht banks have been allowed to set their vaccuum cleaners to 11 and extract wealth from us without fear of prosecution or obstacle.  The financialization (h/t Ticker Guy) of this country is what is killing us, not tax rates.

As for corporate taxes, I won't get too deep into it, but taxing corporations is self-defeating - it kills jobs, leads to higher prices, lower wages, and Herculean efforts by the executives to avoid the taxes, which are usually successful. It's one reaon jobs have been being offshored for 25 years. First, Mexico, finally China.

The real enemy is the financial system.  To the extent our leaders choose to rein them in (a la Andrew Jackson), we will return to prosperity. To the extent they don't, we will flounder under we crash, and millions will literally die as a result.  Choose.

TruthInSunshine's picture

Zimbabwe had a world record of billionaires, dirty, hungry and desperate, as it sank.

To infinity & beyond, sayeth the fractional reserve econo-magicians at the central bank!

http://homepage.mac.com/dtrull/pix/idiotcash.jpg

Surly Bear's picture

corporate taxes are just another way of taxing yourself

You got it, man. Corporations pass the cost of doing business to their customers, or they go out of business.

FEARTHESHARK's picture

If you used some logic you would realize that raising corporate taxes is not even close to being the same thing as raising individual income taxes.  Even if the cost of such taxes is passed on to the consumer, the consumer is not required to buy the item with said costs built in.  The individual taxpayer has no such option to avoid increased taxes on their income (unless the Republican fallacy of "they'll just choose to work less" actually was true).  Is every tax a "socialist idea"?

Shameful's picture

The whole tax system is based on inflation.  Get to double dip by debasing savings as well as forcing to recognize gains when said gains only tracked inflation, and forcing people into higher income tax brackets.  Why I KNOW there won't be deflation, the engine runs on inflation and the guys at the tiller know that.  If everyone lost 50% of wages and prices plunged 50% then less taxes would be paid and those not in debt would actually be living a better life, those in debt would then do best to default and start over, and hell those with savings in cash would be dancing in the streets.

sun tzu's picture

You're absolutely correct. Look at the Alternative Minimum Tax. It was a tax on the rich that was designed in the 1960's and now a family making $175,000 is subject to the higher rates. 

Bendromeda Strain's picture

Kyle Bass dismisses the Buffoon Tax as well as anyone:

http://www.cnbc.com/id/44758280

PrintButtonMoney's picture

Well given that, in addition to our system being based on inflation for tax purposes,  inflation at 2-3% is the STATED goal of the federal reserve ala Ben Bernanke, (who also recognized that inflation is obviously significantly higher than that in the same statement, which I feel like was a couple months back).

It didn't seem they had any real strategies for this particular definition of 'price stability' based on the rate of inflation in terms of bringing inflation down by almost half of where it was at when the statement was made.  I feel like it was a couple months ago at least.

I also think it's hilarious that the whole Joblessness rate is so under-reported in the mainstream news, at 9.1% (and the people of legal working age without work, as a stab in the dark, is probably much closer to like 18-20%) 

and that congress blames the president blames congress, blames the fed etc etc.

 

http://printbuttonmoney.blogspot.com

Rentenmark's picture

Yes inflation is a debtor's best friend.  Who is the largest debtor in the world?  The US.gov!  There is no chance they will allow deflation to occur, it would suicide for them.  Their only way is to inflate, and inflate they will.

Dapper Dan's picture

From the CBO.GOV

 

 

1970  USA population.......................203,323,175

1970  USA GDP..................................$1,013,000,000,000

2009  USA population........................305,745,538

2009  USA GDP...................................$14,326,000,000,000

The USA deficit went from 3 billion in 1970 to $1.4 trillion in 2009

Debt held by the public went from 283 billion in 1970 to $1.5 trillion in 2009

These numbers seem out of line with the population growth for this time frame.

Help me out ZH think tank, I want to bring a sign with this info to the OWS Houston protest tomorrow.

 Is this a significant aberration?

Thanks in advance.

 

 

 

jcmjr's picture

Debt held by public in 2009 was just north $13.5 Trillion.

Antifaschistische's picture

Bingo Sid,

The Testicle from Omaha doesn't care about INCOME tax.  He's almost dead anyway.

Here's my proposal...tax everyone worth over $50 million at 50% of net worth.   Screw income tax...this is a repatriation of dollars from those who've made billions off of easy money and con games.

Then let's see if the Testicle is so happy about paying his fair share...

Caggge's picture

How bout a death tax of 100%. No trusts allowed. You either spend it, give it away, or give it to uncle sam. I think Bush was trying to eliminate the death tax. I don't know how successful he was in this attempt. Did a trust fund baby ever really contribute anything to society? I think not.

 

hambone's picture

BIG BINGO - No aristocracy in America...I mean I could go for $1mil, ok $3mil tax free per dependent...but after that, kids, you are on your own...taxes will be ultra low or almost non-existent during your life but no chance to never pay taxes generation after generation.  Parents job is to teach your kids how to be productive members of society...not hand them gobs of money and lives siphoning off the blood of folks actually working.

Reward those that are capable and penalize those who want to live on generations of trust funders b4 them.

We need more of the Bill Gates, Jobs, Phil Knights of this world...fewer of lucky sperm club living on annuity payments, capital gains, etc.

saiybat's picture

Those at the top that run things via councils also known as NGOs, charitable organizations, and non profit foundations are an aristocracy. The politicians, though, they're headless chickens that are too incompentent to hold a real job in business. They come from the same circles just the politicians are the refuse that's left over after they're kicked out of the business sector usually by their parents that paid them 120k/yr to sit in a storage room and stay out of the way. Most politicians are parasites and calling them an aristocracy is giving far too much credit.

Waterfallsparkles's picture

Big Bingo ".I mean I could go for $1mil, ok $3mil tax free per dependent...but after that, kids, you are on your own."

Many do get that much for their children tax free.  It is called Welfare and they are paid on top of that tax free money for every illegitimate child they have.  Plus, of course free Housing, free Food, free Health Care.

Bendromeda Strain's picture

If you buy a pair of prescription glasses for your kid, you tell them to take care of them, because they are expensive, even if insurance picked up a share of the cost. "Welfare glasses" on the other hand, have no such problem. They are a great invention, where the child can go out in the parking lot and stomp on them, and come immediately back in and say "gimme another, these are broken". At least in my blue non-heaven.

This is the village IT takes, whatever IT is...

Nobody For President's picture

Warren gave $25 Billion to the Bill and Melinda Gates Foundation a couple of years ago - saying something along the lines of they were a lot smarter than he was and could do more good with the money.

Your handle says anti-facist? Check our what the Koch brothers do with their money.

Of all the billionaires in this country, I do not understand why ZH folks is so god damned obsessed with Buffett - the guy basically lives a pretty moderate lifestyle - still in the same house he was in in the '60's and still married to the same woman - how cornball is that? Why no comment on the New York old money billionaires and their third or fourth trophy wife, or the California billionaires with their 27 room mansions and ostentatious lifestyle? 

I don't get it - Warren is public enough, and easy to satarize - bathtub? Gimme a break - but there are a bunch of very rich assholes out there that live a very, very ostentatious lifestyle and don't give a damn about anybody but themselves - and I don't get that with Buffett at all. 

So when you're a billionaire, what are YOU gonna do with your money?

yakmerchant's picture

When I'm a billionaire I'm going to push my wheelbarrow of fiat down to the store and buy bread.   As far as old Warren, he's a hypocrite and a liar.   They may be smarter than he is but I'm pretty sure it's not going toward anything any rational human would consider "good".   I'm not real impressed with the donations to Bill and Melinda as  getting in bed with Turner,Gates and the Rockfellers to see how big a Eugenicist organization they can conjure up with Monsanto doesn't sound like gods work to me.   Not to mention they have the balls to call themselves the "Good Club".  It will be their hubris that destroys them.  

wisefool's picture

Agreed. Uncle warrens PR swan song is not going as he planned. Its been over a year ago now but CNBC had some other ancient codger on rebutting this image as the saint of american investors ... 

para: "This stuff Warren is doing is baloney. I've followed the guy his entire life. He gave his first dime to charity when he was in his late seventies." Its easy to pay yourself $100k when the whole point of it is to dodge taxation like he has done for his entire life. Do you think the baubles he has in giftbags for becky quick and liz clayman come out of his $100k salary? Do you think he writes a personal check for the limo, and deducts it as  business entertaining on his 1040EZ? Sure owns several modest homes, but when he travels, do you think he stays in the Motel 6 with bedspreads that have "flavor" like the rest of us?

As others have mentioned, This is the problem with western economies. total tax code paralysis. you tax a $125k/yr medical resident who is just out of school and works 80 hour weeks the same way you tax some 26 year old trustifarian who gets to be a "assistant director, marketing" of some "charity" like Bachmans "I'll make you not gay" organization.

TPTB know this. That is why Cain is being allowed to rise in the polls/media. I just hope it not too late. If Warren Buffets life is supposed to be the american success story, the chindians are going to eat our lunch. literally.

Bendromeda Strain's picture

It ain't like Warren was out there disavowing good old Charlie Munger's bootstrap comment, after da boyz got their bailout, right? Do you even know what I am talking about, or are you here to get punched in the mouth? The line starts over by the water heater... 

FEARTHESHARK's picture

"Of all the billionaires in this country, I do not understand why ZH folks is so god damned obsessed with Buffett"

Really?  You can't figure it out?  It's the same reason that George Soros gets slammed on these pages, and the same reason the Koch Bros you mentioned do not.  Buffett, like Soros, supports Obama.

DosZap's picture

legal eagle  @ 17:45

Hmm, if we only had more millionaires.

 

Oh, WE Do, and if they haven't thought of it yet, trust me, they will get to it SOON.

Next up on the PLATE, will be Total NET worth, excluding home ownership.After that, it will include VALUE of your Home(if owned), in relationship to the tax roles evals.

 

WAIT and SEE..............If the SOB has enough time, it WILL Happen.

Most folks do not get WHY there are(were) so many SO CALLED millionaires in the USA,prior to this FUBAR.

It included their ENTIRE holdings, and home value.

Otherwise, the number would have  beeen DRASTICALLY lower.

trav7777's picture

yeah, people are scared on PMs when there are those nice fat 401ks and HOUSES sitting there with all that wealth to tax out of the owners

Waterfallsparkles's picture

Legal Eagle,

There is an Asset Tax on Real Estate it is called Property Tax.  Usually 1 to 2.5% of its value every year, depending on where you live.

They should have a yearly Asset Tax on the value of the Stocks you Own.  I bet Buffet would just love that Tax.  Then he would not be spouting he needs to be taxed more.

yakmerchant's picture

Yes let's put more taxes on invested money regardless if you make or lose money.   That will really solve the economic problems.   Genius I say.  Then when I won't buy stocks because that would be completely retarded, and go to invest in a local business maybe you can send the IRS over tax their assets.   You know we'd have to tax that office furniture they just bought.      Maybe then they can come count my silverware at my house and put a tax on that too, because that's an "Asset".  I'm not sure what your angle is, but I can promise until the government stops spending money and starts encouraging capital investment via lower taxes and more business friendly regulations, this train to authoritarian hell isn't stopping anytime soon.

swamp's picture

So why don't you make yourself one so you can be hated by the have nots and taxed to death for the welfare bums and the IRS collecting banksters. Class warfare and we know what class you are in.

Henry Chinaski's picture

Meet the new plan, same as the old plan... Wealth confiscation. Bitchez!

faustian bargain's picture

Let's tax the aliens; I hear they are planning to invade soon.

nmewn's picture

"I hear they are planning to invade soon."

Krugman's long window glass & bricks...its like a paired trade or sumpin ;-)

swamp's picture

They've already invaded in droves and Obama just gave them a pass.

Bendromeda Strain's picture

Obama's the Governor of Texas? Who knew...

Conrad Murray's picture

The only person more foolish than Odumbo, is the person who voted for him.

Sri's picture

and the people those who twice voted for an AWOL drunk and listen to Rush "Man Tits" Limbaugh.

tmosley's picture

Yup.  Zero difference.

sun tzu's picture

Except nobody thought that Bush would pay for their mortgage and gas

tmosley's picture

Sure they did, it was just a different species of leech.