Thursday, 22 September 2011

'Buffett Rule' a Bust in California

LOS ANGELES TIMES: The state's over-reliance on taxing the rich has been a disaster during bad times

If President Obama really wants to see the "Buffett Rule" in action, he should look at California's tax system. The state has been plagued by it for years.

The revenue stream is unstable and the state budget has been a deficit disaster.

Soaking the rich — relying heavily on them for income taxes — has resulted in a precarious revenue roller coaster ride. It's either boom or bust in Sacramento, depending on how the wealthy are faring in the stock market and their other investments.

Billionaire investor Warren E. Buffett's rule is that he shouldn't be paying a lower income tax rate than his secretary or any middle-class taxpayer.

"Legislators in Washington," Buffett complained in a New York Times opinion piece last month, "feel compelled to protect us [mega-rich] much as if we were spotted owls or some other endangered species…. My friends and I have been coddled long enough by a billionaire-friendly Congress."

With rhetorical flourish, Obama incorporated the Buffett Rule into the deficit-cutting plan he announced Monday, declaring that people earning more than $1million shouldn't be allowed to pay a lower tax rate than middle-income families.

In California, we've got what you could call a Buffett Rule-Plus. There's an extra tax bracket — at 10.3% — for income exceeding $1million. » | George Skelton | Capitol Journal | From Sacramento | Thursday, September 22, 2011