Economic Outlook: The Jane Doe Rule

By ANTHONY HALL, United Press International   |   April 12, 2012 at 10:09 AM
share with facebook
share with twitter

GOP budget architect Rep. Paul Ryan said it turns out billionaire Warren Buffett receives the same government benefits as his secretary.

"The president likes to use Warren Buffett and his secretary as an example of why we should raise taxes on the rich. Well, Warren Buffett gets the same health and retirement benefits from the government as his secretary," Ryan, R-Wis., said in an e-mail, The Washington Post reported.

This morally empty statement is, of course, true.

If Buffett's secretary became a billionaire, she would be treated by the government the same as Buffett. If she became a multi-billionaire, she might even have a bill named after her -- except, of course, Ryan, and most other Americans, have no idea what her name is. Her name, as it happens, is Jane Doe, whereas Buffett's name is Warren Buffett, the Sage of Omaha. Generally, she parks her car in Parking Lot B. Whereas, Buffett parks his car in "Mr. Buffett's parking spot." Of course, it's likely his driver does that. But let's not quibble.

There are several arguments surrounding the so-called "Buffett Rule," which stems from an editorial Buffett wrote in which he volunteered himself and, by extension, his mega-rich friends, most of whom, he said, would be willing to pay higher taxes to repay a country that has treated them more than fairly -- and especially while so many others are suffering.

One argument has to do with mathematics. The numbers can be tweaked considerably, but for argument sake, use $165 billion as a starting point. Should President Obama by some moral miracle convince enough Republicans to go along, a solid tax on Americans earning $1 million or more a year would net a peevish $165 billion over 10 years.

This is an acorn sitting next to an oak tree, some economists argue. The number is so small sitting next to the massive U.S. deficit that it is not worth the trouble.

However, that leads to another moral argument: How depraved does one have to be to say that $165 billion is not worth the trouble of a few hours debate in the Senate and House of Representatives and not worthy of a presidential signature. Heck, the ink in the president's pen is worth more than that.

Not really.

A second argument is a moral one. How can government representatives stand idly by while the likes of Jane Doe are taxed at a higher rate than the likes of Buffett?

To paraphrase Jeff Foxworthy, if you're trying to form an answer to that question, chances are you might be a Republican.

The point is nobody cares about any of these arguments -- not really.

The real argument is behavioral. What if you imposed a fair tax system on the country? Would that force anyone with a good idea and a bit of gumption to move to a country with a more favorable tax code so he or she could prosper without losing any sleep at night?

That argument is about incentive. The Buffett Rule, Republicans argue, would wipe out the greed that keeps the system going. Without greed, the system falls apart; everyone would stay in bed; the wheels of industry would grind to a halt.

In international markets Thursday, the Nikkei 225 index in Japan rose 0.7 percent, while the Shanghai composite index in China gained 1.82 percent. The Hang Seng index in Hong Kong rose 0.93 percent, while the Sensex in India climbed 0.77 percent.

The S&P/ASX 200 in Australia added 0.81 percent.

In midday trading in Europe, markets were mostly flat. The FTSE 100 index in Britain was up 0.11 percent, while the DAX 30 in Germany was up 0.07 percent. The CAC 40 in France shed 0.45 percent, while the Stoxx Europe 600 rose 0.02 percent.

Related UPI Stories
Trending Stories