President Obama’s most recent budget, released today, featured the “Buffett Rule,” named after and supported by billionaire investor Warren Buffett, which would require millionaires to pay a minimum 30 percent tax rate . Republicans have repeatedly denounced attempts to raise taxes on the wealthy as “class warfare,” neglecting to mention that their policies would actually raise taxes on the middle class.

In an interview with CNN’s Fareed Zakaria, the billionaire investor George Soros said that he thought he should be paying more in taxes and took aim at Republicans who are trying to stop the “Buffett Rule” from becoming law:

ZAKARIA: What about taxes? Do you support President Obama’s proposal to increase taxes on the wealthy?

SOROS: Yes, I very much do so, because it’s the big boom, the super-bubble that resulted in a great increase in inequality. Not only do we have the after effect where we have slow growth one way or the other, but if you have better distribution of income, the average American will be better off.

Soros would be “one of the biggest losers” from Obama’s plan, he said, but he’s “willing to pay that” for the good of the country. Over the last twelve years, tax rates for the wealthiest 400 Americans were cut nearly in half, even as that group’s income quadrupled. In 2007, 150 of the 400 wealthiest Americans paid an effective tax rate between zero and 15 percent.

Polls have shown a strong amount of public support for the “Buffett Rule,” despite Republican resistance – although at least one Republican is aware of the inequality that exists in our nation’s tax code.

New Jersey Gov. Chris Christie (R-NJ) announced a new plan to cut income taxes by 10 percent over three years during his State of the State address in January. Republicans are once again claiming that this will bring more jobs to the state, thus improving the local economy and ultimately bringing in more revenue to offset the lower rates. (The claim that lower tax rates increases revenue is not borne out by the facts.)

Christie has claimed that his plan is aimed at providing “across the board” tax relief. But as a new analysis of the proposal points out, those who will benefit most from the Governor’s plan would be the Garden State’s wealthiest residents, as its not income taxes, but property taxes that make up the bulk of the tax bill for Jersey’s middle-class:

A family earning $50,000 a year would save $80.50, and those making $100,000 would save $275, according to David Rosen, budget and finance officer with [the Office of Legislative Services]. Families who make $1 million would save $7,265, Rosen said.

The OLS analysis also examined a tax snapshot of 2004, the last time the Treasury Department married property and income tax payments by address. The data show that families in 2004 who made below $200,000 paid a greater share of their income toward property taxes than toward income taxes. For example, a family that makes $80,000 paid about 6 percent of its gross income for property taxes and about 1.6 for income taxes.

The opposite is true for the state’s wealthy, who pay a much higher income tax rate under the state’s progressive tax structure. A family that earned $500,000 in 2004 paid about 1.8 percent of its gross income for property taxes and 5 percent for income taxes.

The Newark Star-Ledger noted in an editorial that Christie’s plan “will primarily benefit New Jersey’s wealthiest class while doing little to ease the property tax burden on the middle class.” Already, according to the Institute on Taxation and Economic Policy (ITEC), New Jerseyans in the bottom 20 percent of earners — those making $12,400 on average — pay 10.7 percent of their overall income in taxes. Meanwhile, those in the top 1 percent — with an average income of $2,258,300 — pay 7.2 percent.

As Times of Trenton columnist George Amick noted, “it’s not the income tax that’s oppressing average New Jerseyans.” According to the ITEP data, property taxes in New Jersey are particularly regressive, while income tax rates are more progressive. Democrats have called for Christie to cut property taxes instead.

Christie’s plan is projected to cost the state $1.3 billion dollars by the time all of the cuts are phased in. In order to make up for that shortfall, some budget changes will have to be made, and if one of those changes is increasing property taxes, Christie’s plan could turn out to be even more regressive than it appears.

– Zachary Bernstein

According to Republican gospel, taxes on investment must always be low, or else investors will simply sit on their money, refusing to do the very thing that could earn them more money. However, as David Abromowitz laid out in Bloobmerg View today, Mitt Romney’s tax returns undermine this argument.

After all, Romney made his fortune via investments made by Bain Capital, the private equity firm that he ran. And Bain’s investments between 1984 and 1999 “occurred when capital-gains rates were much higher than they are today. Yet Bain consistently attracted massive amounts of private capital, and thrived”:

Bain’s haul is further evidence that fair tax rates don’t hold back profit-seeking capitalists, at least until those rates reach a point that no one is proposing. From 1984 until 1999, the top rates on capital gains — the profit from investments as opposed to compensation for work — were often at 28 percent, and never lower than 20 percent. Indeed, in 1987, under President Ronald Reagan, the 20 percent rate rose to 28 percent — a 40 percent increase in potential taxation of Bain investment profit. (Yes, Reagan did raise taxes, even on capital.)

An analysis by the Wall Street Journal of 77 Bain deals in that time period showed that the firm “produced about $2.5 billion in gains for its investors,” on about $1.1 billion invested. Clearly, even with capital-gains rates almost double those today, fund managers such as Romney didn’t lack investors.

As billionaire investor Warren Buffett put it, “I have worked with investors for 60 years and I have yet to see anyone — not even when capital-gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain.” It’s worth remembering that it was conservative icon Ronald Reagan who completely equalized the tax treatment of investment and wage income, rejecting the argument that a lower capital gains rate was necessary to incentivize investment.

As Nobel Prize winning economist Paul Krugman has noted, the case for a lower capital gains tax is dubious at best. “Nothing in our history or experience says that unearned income has to be taxed this lightly,” he wrote.

There have been no shortage of Ronald Reagan mentions on the campaign trail, with Republican candidates Mitt Romney, Newt Gingrich, and Rick Santorum invoking the former president’s name at seemingly every turn. Each argues that only he is truly like Reagan, and that only his massive, budget-busting tax giveaway to the wealthiest Americans is in the true spirit of Reagan’s legacy.

Today, on what would have been Reagan’s 101st birthday, his former economist published an editorial — titled “Why the GOP should stop invoking Reaganomics” — in the Washington Post telling the candidates to stop it with the name-dropping. Bruce Bartlett, who served under both Reagan and George H.W. Bush, outlined the differences between today’s economic circumstances and those of the Reagan years, positing that while curbing inflation was the biggest issue in the Reagan era, today’s economic policies must be focused on boosting demand.

The result of those differences, Bartlett wrote, is that Reagan’s policies “can’t — and shouldn’t — be replicated today”:

Judging from the candidates’ tax proposals, they seem to believe that the most Reagan-like candidate is the one with the biggest tax cut. But as the person who drafted the 1981 Reagan tax cut, I think Republicans misunderstand the premises upon which Reagan’s economic policies were based and why those policies can’t — and shouldn’t — be replicated today. [...]

All of the evidence tells us that the economy’s fundamental problem today is not on the supply side but the demand side. According to a recent study by Credit Suisse, two-thirds of the difference in growth at this point in the business cycle, compared with previous cycles, is due to slower consumer spending. And low inflation — as well as widespread unemployment, vast stocks of unsold houses, empty factories and other indicators — tells us that money is tight, not loose, as was the case in the late 1970s.

Bartlett isn’t the only one noting the weakness of the GOP’s plans to bolster the economic recovery. Multiple economics professors told Reuters that the Republican plans wouldn’t pass an Econ 101 class. The candidates’ economic proposals will explode the deficit, expand income inequality through massive tax breaks to the rich, and hurt the poor and middle classes if enacted, but the GOP continues to ignore evidence that today’s situation is different than Reagan’s.

“Economic conditions are entirely different today than they were in Reagan’s era, and different conditions demand different policies,” Bartlett concluded. “Those who say otherwise are simply engaging in cookie-cutter economics — proposing whatever was popular and seemed to work once, without regard to changing circumstances.”