I’m told the so-called “Buffet Rule”, where capital gains taxes are increased to the level of regular income (to make it “fair”) will raise about $4 billion per year. Chump change to the Federal government, which spends about that much EVERY TEN HOURS, 40% of it borrowed (source).
But more importantly, how much will it cost; specifically, how many jobs will it cost?
Why jobs? Because the millionaire/billionaire fat cats who live on their investments and whom the “Buffet Rule” is intended to hurt, won’t get hurt at all. They will have the ability to adjust; to change what they are doing and move where they are doing it. It’s all the people who work for them that will be hit the hardest. And it will be the low-wage earners who go first: the cooks, the gardners/landscapers, the drivers, the maids, and the factory workers who make the high-dollar toys for rich boys. Hey, if your income has been cut by between several hundred thousand and several million dollars per year, you’ve got to cut somewhere!
So if $4 billion dollars a year is suddenly removed from the private economy and sent to the government, how many people will lose their jobs? Let’s do the math.
The minimum hourly wage is $7.25 in most states, but to be conservative, we’ll say the average person who will lose their job will be at the $10 per hour level (that also makes the math a WHOLE LOT simpler). At $10 per hour times 40 hours per week times 50 weeks, that’s $20,000. $4 billion divided by $20,000 is 200,000. That’s 200,000 people who could lose their jobs.
But at least it will be “fair”!
But that is just the beginning. The United States has recently become the country with the highest business tax rate of all developed countries. That’s another way to say almost any country is more attractive to a business startup than the good ol’ USA. The “Buffet Rule” fat cats are pretty much ALL business people, either directly through businesses they own, or indirectly through businesses they invest in. When the ginormous “Buffet” tax is enacted, how many businesses will simply pack up and move out of the country?
We already see that happening in the mass business exodus from high-tax states like California and New York and the booming economies of Sunbelt states like Texas. We also see it happening with multi-national corporations choosing to move their headquarters overseas. How many jobs will simply move away?
But at least it will be fair.
