Romney and Billionaires’ Tax Proposals

Former U.S. Senator Mitt Romney, representing Utah, is not the first billionaire to claim he wants to pay more taxes—suggesting that, perhaps, other Americans should handle tax increases as well.

He expressed in a recent statement, “it’s time for rich people like me to pay more.” His proposal includes higher taxes on various areas such as payroll, real estate, carried interest, and even death.

It kind of reminds me of how a person might walk into a restaurant, order a high-end meal, and then think everyone else should also pick up the tab for similar fancy dishes. Rather than taking on those larger bills himself, Romney seems to think patrons should cover the extra costs.

Warren Buffett, the renowned investor, mirrors this approach. He’s known for lamenting that his secretary pays a higher tax rate than he does. Instead of advocating for lower taxes for her, he has spent years pushing to increase taxes for others.

Interestingly enough, Buffett has also faced scrutiny for hypocritical behavior. Despite his calls for higher taxes, his company, Berkshire Hathaway, sued the IRS years ago to retain $16.3 million in deductions, earning a $23 million judgment in the process.

Moreover, since 2006, Buffett shielded a staggering $43 billion from federal taxes through donations to Bill Gates, helping to ensure that Gates and his foundation remain financially secure.

This recurring “tax me more” philosophy seems to stem from a disconnect often echoed by figures like Mayor Zohran Mamdani from New York City, Congresswoman Alexandria Ocasio-Cortez, and Senator Bernie Sanders. They frequently claim that “the rich” aren’t contributing their “fair share.”

But, honestly, they don’t clarify what that “fair share” actually means—aside from “more!”

Research from the Tax Foundation challenges the narrative pushed by these advocates. The latest IRS statistics show that in 2022, the top 1% of earners accounted for 22.4% of all adjusted gross income and paid an average income tax rate of 26.1%, contributing 40.4% of all federal income taxes collected.

The top 10% had a combined income of 49.4% and faced an average tax rate of 21.1%, ultimately covering 72% of total income taxes. Meanwhile, the bottom 50% of earners brought in 11.5% of adjusted gross income, paying a mere 3% of the total federal income taxes.

If the top income earners aren’t already covering their “fair share,” what exactly do the advocates consider fair? Would they think 80% or even 90% is appropriate—and would anything less than 100% be acceptable?

There’s nothing preventing Romney, Buffett, or any other billionaire from willingly contributing even more to the U.S. Treasury. In fact, to make this easier for them, perhaps a measure like the Higher-rate Optional Tax (HOT Tax) could be introduced.

This HOT Tax could simply add a line to IRS Form 1040, allowing folks to specify a higher tax rate they prefer to pay. It would let those wealthy individuals contribute more without imposing heavier burdens on others who want to keep more of their earnings.

This approach might even complicate the Democrats’ attempts to use class warfare for broad tax increases.