“Even taking every last penny from every individual making more than $10 million per year would only reduce the nation's deficit by 12 percent and the debt by 2 percent,” the non-partisan Tax Foundation’s David Logan writes.
“There's simply not enough wealth in the community of the rich to erase this country's problems by waving some magic tax wand,” said Logan.
Buffett, in an August 15 op-ed in the New York Times said it was time to stop “coddling” the wealthy and called on Congress to raise taxes on those making $1 million or more.
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“But for those making more than $1 million there were 236,883 such households in 2009 I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more there were 8,274 in 2009 I would suggest an additional increase in rate,” Buffett wrote.
“My friends and I have been coddled long enough by a billionaire-friendly Congress,” wrote Buffett.
However, according to the Tax Foundation study written by Logan, even taxing the nation’s millionaires at 50 percent – even eliminating loopholes and deductions – would only reduce the deficit by 8 percent and the national debt by 1 percent.
“[T]aking half of the yearly income from every person making between one and ten million dollars would only decrease the nation's debt by 1%,” the report said.
Taxing millionaires at an effective tax rate of 50 percent would raise only $120 billion more, according to Tax Foundation calculations based on IRS data.
Taxing those who make $10 million or more at an even higher rate, as Buffett advised, would also do little to reduce the deficit and debt. Tax Foundation calculations indicate that taxing these individuals at an effective rate of 100 percent would only net the government $186 billion, reducing the deficit by 12 percent and the debt by an additional 2 percent.
In fact, the only way for the government to solve its fiscal issues with revenue would be to confiscate every single dollar from every single American making $200,000 or more per year, the study said.
“Finally, to put everything in perspective, think about what would need to be done to erase the federal deficit this year: After everyone making more than $200,000/year has paid taxes, the IRS would need to take every single penny of disposable income they have left. Such an act would raise approximately $1.53 trillion,” reported the Tax Foundation.
Buffett, in his New York Times op-ed, said, “It’s time for our government to get serious about shared sacrifice.”