Which Is Fairer: 'Buffet Rule' or 'Romney Rule'?

If watching news these days, it is hard to not see any articles or videos that talk about the 2012 presidential campaign. One of the hottest issues during the campaign has been circled around future tax. Indeed, in September 2011, president Obama announced his “tax reform” that proposes to tax on rich people. On the other hand, his opponent Mr. Romney proposed to “...double down on the tax cuts for the wealthy.”  On the Kudlow Report from CNBC on Friday 13^th April, the topic is continued discussed; this time, it was a debate between Republicans and Democrats on which one between “Buffet Tax” and “Romney Rule” is fairer.

            According to Keith Boykin of Clinton administration, “It’s not about class warfare… [it’s] not about attacking wealth… [it’s] about making sure that everybody’s paying their fair share.” On the other hand, Matt Lewis of the Daily Caller argued that Buffet Tax would damage the country’s economy because taxing on wealthy people who invest in the country and create jobs on the market would discourage them to stop putting their money here. He also recalled the initial purpose of setting low tax on capital gains was to encourage investors to invest in the market, implying that Buffet Tax would go against the very first purpose of capital gain tax. He added: “I feel like Democrats and Joe Biden would rather get revenge and get even with the rich than spur the economy.”

            As first reading the article, I keep wondering about Democrat Keith Boykin’s saying that “[it’s all] about making sure that everybody’s paying their fair share.” But what is a true definition of “fair share?” It is generally true that rich people should pay higher tax to help the society they belong to. However, How much more should they pay to be fair? There is no single answer for it because it depends on different people from different background and income status. Would it be fair if letting the voters answer it by going for whatever the majority of people think? I would not think so. In fact, there are more poor people than rich people in the country, and poor people would like a tax that is as high as possible on rich people. If determining the best answer for what is fairness based on people’s opinions seems impossible, why not leave the answer to the economy? That is, whichever tax plan that may be best for the economy, then it should the fair one. Indeed, as long as the economy is good, everybody would be happy, and no one would disagree with it. If so, Buffer Tax would not be fair. Why? Because it hamper economy recovery/growth by discouraging investors to invest in the economy; without investments from investors, companies could not grow and new firms would not be established neither, means less new jobs would be created. On the other hand, decreasing tax on capital gains would encourage both domestic and foreign investors to invest in the economy, spurring the economy to grow.

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