Skip to main content

Obama needs more than symbolism of 'Buffett Rule'

By James K. Galbraith, Special to CNN
April 11, 2012 -- Updated 1628 GMT (0028 HKT)
President Barack Obama touts the
President Barack Obama touts the "Buffett Rule" in a speech Tuesday at Florida Atlantic University in Boca Raton, Florida.
STORY HIGHLIGHTS
  • Democrats are making a case for the "Buffett Rule" to raise taxes on the very rich
  • James Galbraith: While the legislation calls for tax fairness, it is a symbolic move
  • Galbraith says the Buffett Rule won't solve any significant economic problem
  • It's better if President Obama would focus on raising the minimum wage, he says

Editor's note: James K. Galbraith is the author of the new book "Inequality and Instability: A Study of the World Economy Just Before the Great Crisis" (Oxford University Press). He teaches at the University of Texas at Austin.

(CNN) -- In the early 1980s when I served on the staff of the Joint Economic Committee, we invited the Republican deficit scourge, Peter G. Peterson, to testify on Reaganomics, but he wouldn't come. Somewhat understandably, he declined to sabotage his own team. This week, when I was asked to comment on President Barack Obama's proposed "Buffett Rule," I had a similar urge to duck. But it passed.

The Buffett Rule would increase taxes on a handful of Mitt-Romney-like figures in today's America, raising a few billions of dollars in new revenues each year from the very rich. It is perfectly tailored to the Obama political style, which is to nod symbolically leftward while reserving big concessions for banks, venture capitalists and insurance companies.

Symbolic gestures have their place. In this case, the proposed rule states an important principle of tax fairness. It calls attention to the larger issue of income inequality. It could be the start of a larger push for tax reform. No political progressive should sneer at an idea that helps bring these issues into focus. And especially not, if the direct effect might be to cost Romney, personally, millions of dollars. The image of him writing the check will, no doubt, give universal pleasure.

James K. Galbraith
James K. Galbraith

Another virtue of the Buffett Rule is that it exposes the craven hypocrisy of its opponents. This is, after all, a very small tax increase. It is exquisitely targeted on a few individuals with large investment incomes. As drafted by Sen. Sheldon Whitehouse, D-Rhode Island, it would provide a useful spur to their charity. There is no serious argument that the rule would make the tax code more inefficient than it already is. The grounds for opposing it can only be, well, craven and hypocritical.

And yet, at the same time, by itself, the Buffett Rule solves no significant economic problem. It will not create any jobs, raise any wages, reduce the crushing debts of the middle class, slow the wave of foreclosures, conserve energy or reduce the price of gas. Nor will it restore confidence in the banks. And it is directed, at least in principle, toward a notorious nonproblem, namely the deficit and the public debt, on which we waste far too much ink as things stand.

I noticed in the news that a number of states are once again taking the lead on measures to raise the minimum wage -- with Massachusetts moving toward a minimum of $10 per hour, and with other measures on the table in New York, Illinois, New Jersey, Connecticut and Missouri. Meanwhile Sen. Tom Harkin, D-Iowa, is pressing for the federal minimum to rise to $9.80 per hour by 2014.

Obama: 'Buffett Rule' needs GOP support
Obama: Time to choose country's direction
Explain it to me: The 'Buffett Rule'

According to the Economic Policy Institute, Harkin's proposal would raise the incomes of 28 million American workers. It would make a big difference in the South, where wages are lower. It would especially help younger workers, minorities and women. It would not add to the deficit -- since federal workers all make more than that anyway -- and would likely spur the economy and increase tax revenues -- by a lot more than the Buffett Rule.

I've proposed pushing the minimum wage up to $12 an hour, and at least some conservatives -- the editors at The American Conservative -- agree with this goal. (Actually I took my cue from them.) More recently, Reihan Salam at the National Review has weighed in, calling the idea "a tougher call than I would've thought." Salam suggested that Romney could transform his campaign by endorsing it. That's still possible, I suppose. But anyway we have a discussion and maybe even a left-right coalition -- that rarest of political birds -- getting under way. And on something real.

The Buffett Rule would zing a few thousand high fliers, which is not bad. But maybe Obama should go beyond symbols and grab this idea while it's hot.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of James K. Galbraith.

ADVERTISEMENT
Part of complete coverage on
October 1, 2014 -- Updated 1947 GMT (0347 HKT)
Julian Zelizer says Jimmy Carter's message about the need to restore trust in public officials is a vital one, decades after the now 90-year-old he first voiced it
October 1, 2014 -- Updated 2156 GMT (0556 HKT)
Ford Vox says mistakes and missed opportunities along the line to a diagnosis of Ebola in a Liberian man have put Dallas residents at risk of fatal infection
October 1, 2014 -- Updated 2221 GMT (0621 HKT)
Pepper Schwartz says California is trying, but its law requiring step-by-step consent is just not the way hot and heavy sex proceeds on college campuses
October 1, 2014 -- Updated 2048 GMT (0448 HKT)
Mike Downey says long-suffering fans, waiting for good playoff news since 1985, finally get something to cheer about
October 1, 2014 -- Updated 2139 GMT (0539 HKT)
Steve Israel saysJohn Boehner's Congress and the tea party will be remembered for shutting down government one year ago
October 1, 2014 -- Updated 1856 GMT (0256 HKT)
Yep. You read the headline right, says Peter Bergen, writing on the new government that stresses national unity
October 1, 2014 -- Updated 2312 GMT (0712 HKT)
Hong Kong's pro-democracy demonstrators are but the latest freedom group to be abandoned by the Obama administration, says Mike Gonzalez
September 30, 2014 -- Updated 1653 GMT (0053 HKT)
Jeff Yang calls Ello a wakeup call to Facebook and Twitter, and a sign of hope for fast-rising upstarts Pinterest and Snapchat.
October 1, 2014 -- Updated 1423 GMT (2223 HKT)
Paul Waldman says the Secret Service should examine its procedures to make sure there are no threats to the White House--but without losing the openness so valuable to democracy
October 1, 2014 -- Updated 1455 GMT (2255 HKT)
Jesse Williams says the videotape and 911 call that resulted in police gunning down John Crawford at a Walmart reveals the fatal injustice of racial assumptions
September 30, 2014 -- Updated 2303 GMT (0703 HKT)
Mel Robbins says officials should drop the P.C. pose: The beheading in Oklahoma was not workplace violence. Plenty of evidence shows Alton Nolen was an admirer of ISIS.
September 30, 2014 -- Updated 1911 GMT (0311 HKT)
The Occupy Central movement has already achieved much by bringing greater attention to Hong Kong's struggle for democracy, William Piekos says..
September 30, 2014 -- Updated 1911 GMT (0311 HKT)
The Occupy Central movement has already achieved much by bringing greater attention to Hong Kong's struggle for democracy, writes William Piekos.
September 30, 2014 -- Updated 1413 GMT (2213 HKT)
As Prime Minister Narendra Modi visits America, Madeleine Albright says a world roiled by conflict needs these two great democracies to commit to moving their partnership forward
September 30, 2014 -- Updated 1404 GMT (2204 HKT)
John Sutter: Lake Providence, Louisiana, is the parish seat of the "most unequal place in America." And until somewhat recently, the poor side of town was invisible on Google Street View.
September 29, 2014 -- Updated 1311 GMT (2111 HKT)
Julian Zelizer says in the run up to the 2016 election the party faces divisions on its approach to the U.S.'s place in the world
September 29, 2014 -- Updated 1419 GMT (2219 HKT)
Ruben Navarrette says Common Core supporters can't devise a new set of standards and then fail to effectively sell it.
September 30, 2014 -- Updated 1329 GMT (2129 HKT)
Earlier this month, Kenyans commemorated the heinous attack on the Westgate Mall in Nairobi.
September 30, 2014 -- Updated 1859 GMT (0259 HKT)
David Wheeler says Colorado students are right to protest curriculum changes that downplays civil disobedience.
September 27, 2014 -- Updated 0158 GMT (0958 HKT)
Sally Kohn says when people click on hacked celebrity photos or ISIS videos, they are encouraging the bad guys.
September 26, 2014 -- Updated 1155 GMT (1955 HKT)
Loren Bunche says she walked by a homeless man every day and felt bad about it -- until one day she paused to get to know him
September 30, 2014 -- Updated 1332 GMT (2132 HKT)
ISIS grabs headlines on social media, but hateful speech is no match for moderate voices, says Nadia Oweidat.
September 29, 2014 -- Updated 1233 GMT (2033 HKT)
A new report counts jihadists fighting globally. The verdict? The threat isn't that big, says Peter Bergen.
September 23, 2014 -- Updated 2137 GMT (0537 HKT)
Ebola could become the biggest humanitarian disaster in a generation, writes former British Prime Minister Tony Blair
September 26, 2014 -- Updated 1658 GMT (0058 HKT)
ISIS has shocked the world. But will releasing videos of executions backfire? Four experts give their take.
September 26, 2014 -- Updated 1439 GMT (2239 HKT)
Eric Holder kicked off his stormy tenure as attorney general with a challenge to the public that set tone for six turbulent years as top law-enforcement officer.
September 26, 2014 -- Updated 1309 GMT (2109 HKT)
LZ Granderson says Obama was elected as a war-ending change agent, not a leader who would leave behind for his successor new engagement in Iraq and Syria. Is he as disappointed as the rest of us?
September 24, 2014 -- Updated 0910 GMT (1710 HKT)
Gayle Lemmon says the question now is how to translate all the high-profile feminizing into real gains for women
ADVERTISEMENT