Buffett Rule Tax Legislation Introduced in Senate

Sen. Sheldon Whitehouse (D-RI) introduced "Buffett Rule" legislation Wednesday that would impose a minimum 30 percent tax rate on those earning $1 million or more.

The “Paying a Fair Share Act,” which is co-sponsored by Democratic Senators Daniel Akaaka, Mark Begich, Richard Blumental, Tom Harkin, Patrick Leahy, Bernie Sanders, and Chuck Schumer, was created to “simplify taxes, discourage tax dodges, reduce the deficit, and bring fairness and common sense to our tax system,” Whitehouse said in his floor statement.

President Obama, in his State of the Union address, said, “Tax reform should follow the Buffett Rule,” so named for billionaire investor Warren Buffett, who in an op-ed piece for The New York Times, bemoaned, “While most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks” and called on Congress to stop “coddling” the super-rich.

Obama called for a change in the tax code “so that people like me, and an awful lot of members of Congress, pay our fair share of taxes…Right now, Warren Buffett pays a lower tax rate than his secretary.”

In a conference call with reporters earlier this week, Whitehouse clarified his legislation: “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.”

Nearly seven-in10 investors surveyed last October by Millionaire Corner said they supported raising taxes on individuals with more than $1 million in income. The proposal has cross-generational appeal: Nearly three-quarters (71 percent) of baby boomers said they favored the Buffett Rule, as did 69 percent of those under 40.

Less than half (45 percent) of the investors said they favored a tax hike that would hit closer to home – increases for individuals who make $250,000 a year.

The New York Times cites Congressional Research Service estimates that the legislation would affect about a quarter of all millionaires, or 94,500 taxpayers.

Comedian Chris Rock, for one, said he is willing to play by the Buffett Rule. Promoting his new film at the Sundance Film Festival, he said, “I look at it this way: I can pay higher taxes and people can have jobs, or I can pay lower taxes and have my kid’s teacher asking me for a loan ‘cause she’s going to lose her house, which is true. So I’m going to lose the money no matter what.”