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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The law is correct and fair .Millionaires have to pay their fair share as middle class does
The arguments against this are really weak. "If investors don't get as good of a return they won't invest as much." Really?
Because I imagine they will invest MORE to make up the difference. Thus creating untold numbers of jobs and helping EVERYONE.
But hey, Republican logic. Who can argue with it?
Grandstanding before an election is all this is. The Senate knows it has zero chance of passing, so there are no worries for the likes of Buffet or Romney or any other bloodsucker on Wall Street
If people like Buffet want to pay more taxes let him donate.
We can't get this guy out of office soon enough. He's just clueless. What a disaster.
I like the principle, but this will require more thought. Maybe the answer is to have short term gains, medium term gains, and long term gains. In this case medium term investments might be somewhere between 3 and 5 years. Long term investments could still have a lower tax rate incentive.
have to asj since when is someon emakin gover 1 million a year considered middle class or did you not read the article? this bill woul dnot effect the middle class and that is a fact.........
Has "it will stifle job creation" become the fallback excuse for any and all conservative obstruction now?
Conservatives have cried wolf too many times, and now anything they say about fiscal matters or the economy I feel cannot be trusted or believed.
This will be interesting to see how it is implemented and how many dollars are actually brought in. One reason tax rates have been reduced from time to time was the trade off to simplfy the process. (loopholes to some) For those with a business know the tax process changes every year. We are on first name basis with our CPA. I can only guess with this rate increase there will be more incentives for investments. Especially at this time. This means even more changes to the tax code each year so those making over 1 million and even those under will have more deductions which impacts the AGI and lowers the tax paid for a greater number of people. You have to be careful what you wish for. It will be important to see how this is written and implemented through the years.
It doesn't matter, the filibuster record will be added to as the GOP/TP/Norquist puppets obstruct progress again.
I will just sell $999k worth of stock
Millionaires give Republicans 10million in campaign donations, (so they wouldn't pay one million a year in taxes), it doesn't make any sense, right?. But I understand , I received 7000 in tax return, and dont want to give back 500 that I owe them. THIS IS GREED BABY.
I love all the people who can't read. This does not raise the Capital Gains tax at all. You "Middle Class Investors" are safe unless you earn more than a million dollars and your effective tax rate is less than than 30%. If either of those aren't true for you, than nothing changes.
This is just another in a series of politically motivated pieces of legislation that all of Congress knows has no chance of passing. This wastes time and money for political purposes instead of actually doing something to help the nation.
There should be a minimum tax for all income sources for all. This should be 10% to 15% range with no deductions of any kind applicable to the minimum. Any tax liability over the minimum could be offset by deductions.
If the government would limit its spending to no more than 15% of GDP and require a balanced budget higher taxes would not be needed.
This bill is long overdue. The very wealthy should be willing to pay their far share of taxes.
Congress should no longer be able to vote itself a raise. Their salaries should be set to a fractional percentage of GDP that automatically increases or decreases with the GDP. Members of Congress who have substantial assets should get paid only a dollar. Those with few assets the full salary. Those in between an amount relative to their asset and income bracket. The more they have, the less they get paid.
then the rich will jsut put all their money into a SUPERPAC where u can do absolutely anything u want with the money. u can invest any amount u please and do anything u want with the money....
This isn't raising the capital gains tax. This is imposing an "Alternative Minimum Tax Rate" for the rich. When I sold my interest in a company, why did I have to pay 30%? Because I am not a millionaire. I had to pay the "Alternative Minimum Tax rate" for the poor and middle class. Yes, there is such a law. If you aren't filthy rich, you will pay a minimum rate, no matter where your money came from. Why shouldn't the rich have the same law?
We need to simplify the tax code AND have capital gains equal to income why? because it is income! The income tax should be every kind of money that a person gets that they did not otherwise have either by labor, investment, estate, luck, ext, and should be taxed as so 0-30k taxed at 5% 30k-100k at 15% 100k-1mil 23% and 1mil+ at 30% with all deductions, write offs that are currently on the books limited to 5% of income. (if you make 75k your first 30k will be taxed at 5% and the remaining 45k will be taxed at 15% before writeoffs and deductions)
This is a more fair tax code, a simpler tax code, and it lowers taxes on just about everyone. Why wont it happen? because wall-street and congress dont wont it to.
So if you make one million one hundred dallers you get taxed 30 percent are you going to quit ivesting were you make 700,000 dallers cause you didnt make your million come. So seems you have to pay more you would make nothing at all in that please tell me gow that goes
Makes perfect sense to me. Romney can say he has given to Charities, like lostly Mormon-specific;) So, all these millionaires and billionaires will fund only those they like. At least if it's with govt., they can fund another war, right?
Economics for dummies:
if taxes on investments go up will there more or less investing?
who does more investing? The rich or the not so rich?
If there is less investing will the stock market go up or down?
If the stock market goes down with there be more jobs or fewer jobs?
If there are fewer jobs who gets hurt more? the rich or the not so rich?
Still think this is a good idea? if you said yes, you failed! go back and read the questions again and think this time!
All you little guys are subject to paying the Alernative Minimum Tax so why shouldn't the rich have a minimum tax? This will not hurt the stock market because investors do not watch the tax rate until the end of the year when they start their selloff. Then they selloff their dogs and take it off their tax.