Washington (CNN) - Senate Democrats formally unveiled legislation Wednesday to ensure that all millionaires would pay a minimum federal tax of 30 percent.
The legislation comes as the relatively low tax rate for some high earners –like investor Warren Buffett and GOP presidential candidate Mitt Romney– takes center stage in both the policy and political arenas in Washington.
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President Obama and congressional Democrats have made enactment of the "Buffett Rule," which they say would force high earners pay a higher tax rate than their secretaries, a central part of their re-election messages. They argue it's both a matter of fairness and the best way to reduce the staggering deficit.
Buffett supports the Democrats' legislation.
"These middle class families are really struggling to get by and then they find out that some people with really extremely high incomes are actually paying lower all-in federal tax rate than they are. That's, to them, just not common sense," said Sen. Sheldon Whitehouse, D-Rhode Island, and author of the bill. "Americans deserve a straight deal and right now they are not getting one from our tax system."
A key reason Buffett and Romney pay a lower tax rates is because most of their income comes from investments. Taxes on capital gains from investments are capped at 15%.
The legislation would apply to people earning more than $1 million a year, be it from salaries or investments or both. They could still take some deductions – such as for charitable giving – but after all is said and done, they must pay an effective tax rate of at least 30 percent of their income as federal taxes.
Whitehouse says his legislation would raise billions for the government but there is no official estimate from the Congressional Budget Office about how much it would raise.
Most Republican strongly oppose raising the capital gains tax because they argue taxing investments at a higher rate will stifle job creation and hurt the economy.
Senate Democratic leaders have not decided when they will push for a vote on the legislation, which is called the "Paying a Fair Share Act of 2012." They want to consider first a handful of bills they consider to be job creation measures, including a highway funding bill, the FAA funding bill, and postal reform bill, according to aides.
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This looks to me like it could potentially hurt the stock market. At least hurt middle class investors (like me) that don't have millions to invest. I don't make much in the market anyway and if you take 30% of it, basically double, it really isn't going to be worth it to me to invest. If I understand this correctly (I'm no financial expert by any means), it could broaden the gap between the rich and middle class. If I have it wrong, someone explain it to me please.
The last time Congress tried to raise the capital gains tax, a huge lobby formed to fight it. And they won. Mitt Romney led the lobbying group.
Is the GOP still touting that nonsense about "job creators"? Hasn't that already been thourally debunked? If they had to pay higher taxes on dividend interest, perhaps they would indeed become the risk takers again and begin creating jobs, instead of just letting their money sit in offshore accounts.There's incentive for you.
This nation needs this bill desperately, o.k, Shame on Congress and Senate idiots not to comprehend it and pass it all this time. What took so long. Now this nation is in this fiscal mess because No one were dare enough to pass this bill. Had it passed, Romney would not have paid 13.8% taxes, he ought to have paid 40-45 percent taxes. So are wealthy. Nation would not have doomed with gloom. Just pass it. OK. Then talk. Buffet makes sense.
Making millionaires pay their fair share won't cost a single, solitary job. Not one. This is evidenced by the fact that the overwhelming majority of their income, in whatever form it may be, is not used to hire people. There is no valid economic basis whatsoever for the claim that making millionaires pay as much as their secretaries in taxes would cause them to initiate mass layoffs.
If Republicans are so concerned about millionaires creating jobs, why not propose a law mandating that millionaires dedicate a minimum percentage of their income toward hiring? Something tells me they'd take issue with that proposal. Again, proof that this has nothing to do with jobs and everything to do with simple greed at the expense our country's well-being.
only hurts u if u make 1 million or more. read the whole article..
Are you a millionaire?
This could bring back the Clinton Economy.
I like the intent but I don't think it's a fair way to go about solving this issue...
Will the Republicans please shut up on this baloney about taxing the rich resulting in less incentives to create jobs? For heaven's sake, if that were true, we wouldn't have a jobs crisis right now. All you so-called job creators out there: WHERE ARE THE JOBS YOU'RE SUPPOSED TO BE CREATING???? Your taxes are at an all-time low. So, where are the jobs??? Either produce jobs you claim to create or shut up.
Girgi– You wouldn't pay the 30% rate unless you make over a million dollars per year from all of your income (after deductions). I don't know about you, but that certainly doesn't apply to me or anyone in the middle class.
@Gurgi Unless you make over $1 million annually, this bill wouldn't apply to you. Therefore, it would not effect "middle class investors" since if you make over $1million, you are not middle class.
@Gurdi – If you don't make more than the cutoff income (I believe it is $1 million), this will not impact you at all. And before anyone starts screaming about job creators, here are three facts:
(1) The economy did just fine in the 50's when the top marginal rate was 90% and through much of the 60's when the top rate on unearned income was 70% (I am not arguing for rates that high).
(2) Business decisions are based in EBITDA (earnings before interest, taxes, depreciation, and amortization)
(3) Job creators are a dime a dozen. If you want to take your marbles and go home due to a 30% tax rate, go ahead. There will be a long line waiting to take the opportunity you passed up.
Mitt "Gordon Gekko" Romney, like his friends, just want to keep paying their 13.7% tax rate. The will say and do anything to keep it. Don't get sucked in by their BS. Please don't vote for a coprprate raiding parasite. Obama 2012
Buffett Bill meet the paper shredder.
Doesn't all monetary bills have to be originated in the House?
It won't bring back the Clinton economy as that was based on 1) lower taxes, and 2) the explosion of the internet.
If only we had a good thirty years of trickle down economics being an abject failure to demonstrate that this bill is needed. Yep, you sure would have to stupid or possibly illiterate to ignore thirty years of evidence empirically proving that tax cuts for the extremely wealthy leads to zero new jobs or other benefits for everyone else. Hmmm... Now where could we find such data?
Ken in MD–
We already have extremely high CGT anyway. Raising them means less investors, less investment, means money goes elsewhere.
if the dem have something to do with it,were screwed
GOP job creating touting, what jobs did they create, baking Pizza, selling TVs, or cell phones. shame.
If the rich pay their fair share of taxes, guess what: They are still rich.
So, if you don't make $1 million a year, you don't have that 30% tax rate?
I want to repeat what ha said. It only hurts if you make a million or more a year. The average investor will not be subject to 30%. This fact will be ignored by republicans who will try to terrorize small investors, of course, but spin machines can't alter truth.
@gurgi – Are you going to make more than $1 million dollars? It's pretty easy, if you will make less don't worry. If you are going to make more than that then you will pay more. But if you make $1 million in a year and can't afford to invest because of the taxes, you are not managing your money well at all. 30% fed taxes is still the smaller than what rich people paid before Bush was pres. They didn't complain much then. Why now?
Ok, I'm a bit slow to update the page. I got it. Thanks.