Will the Buffett Rule Become the Buffett Law?

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  • Advocacy Team

Which Senators Will Choose Millionaires Over the Middle Class?

In his State of the Union speech, President Obama renewed his call for action on the Buffett Rule — the simple idea that no millionaire should pay a lower tax rate than middle class Americans.  He also added some detail to the proposal — that millionaires and billionaires should pay a minimum tax rate of 30 percent:

Tax reform should follow the Buffett Rule.  If you make more than $1 million a year, you should not pay less than 30 percent in taxes.  And my Republican friend Tom Coburn is right:  Washington should stop subsidizing millionaires.  In fact, if you’re earning a million dollars a year, you shouldn’t get special tax subsidies or deductions.  On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn’t go up.  (Applause.)  You’re the ones struggling with rising costs and stagnant wages.  You’re the ones who need relief.

Now, you can call this class warfare all you want.  But asking a billionaire to pay at least as much as his secretary in taxes?  Most Americans would call that common sense.

We don’t begrudge financial success in this country.  We admire it.  When Americans talk about folks like me paying my fair share of taxes, it’s not because they envy the rich.  It’s because they understand that when I get a tax break I don’t need and the country can’t afford, it either adds to the deficit, or somebody else has to make up the difference — like a senior on a fixed income, or a student trying to get through school, or a family trying to make ends meet.  That’s not right.  Americans know that’s not right.  They know that this generation’s success is only possible because past generations felt a responsibility to each other, and to the future of their country, and they know our way of life will only endure if we feel that same sense of shared responsibility.  That’s how we’ll reduce our deficit.  That’s an America built to last.  (Applause.)

Earlier this week, Senator Sheldon Whitehouse (D-RI) unveiled a plan to turn this Buffett Rule into a Buffett Law.  Here are the details:

Whitehouse clarified that the proposal — the first concrete legislative vehicle for implementing the “Buffett Rule” — will not tamper with existing tax rates. Instead, under the proposal, those making more than $1 million a year would be required to calculate their overall tax rate, taking into account all their income and the full sum of what they pay in taxes. If that amount adds up to less than 30 percent, they would be required to make up the difference.

Whitehouse boiled down the proposal into one line: “If your income is over 1 million, multiply it by 0.3, and if that number is bigger than you’d otherwise be paying, pay that.”

Unsurprisingly, the proposal is enormously popular, according to a new poll out this morning:

When it comes to the so-called Buffett Rule—named for billionaire investor Warren Buffett—65 percent surveyed agreed with the proposition that Congress should “establish a new rule that anyone who earns at least $1 million annually must pay at least 30 percent of their income in taxes,” while just 31 percent disagreed.

IN ONE SENTENCE: Senators will once again have another clear chance to show who they stand with: millionaires or the middle class.

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Advocacy Team