In his plan to reduce the nation’s debt, President Obama proposed instituting the “Buffett Rule,” named for billionaire Warren Buffett. The proposal would tax millionaires at the same rate as, or more than, those in the middle class.
The key to President Obama’s plan is the idea of everyone paying their fair share – that millionaires and billionaires should not pay a lower rate than those in the middle class. But when determining what impact that might have, Indiana Business Research Center Director Jerry Conover says the president’s plan is still short on details.
“When he says millionaires and billionaires, is he talking about one million and up and what counts in that income and what doesn’t?” asks Conover, “All of those things would have an effect on how much revenue it would generate.”
In the most recent data available, a little more than 2,600 Hoosiers make seven figures or more. Even if a tax rate is agreed on, Conover says there is still plenty left to decide before revenue estimates could be made.
“Well, will we allow deductions for anything, like mortgage payments on a home, or tax credits for, like paying state income taxes and things like that? That muddies the waters,” said Conover.
Conover says figuring out what is meant by a “fair share” is a delicate balance, and neither side has delved into the details with their plans yet.