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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You know the number of morons on this board is amazing. Why should anyone pay a higher percentage because they earn more? They should NOT. The bill is a socialist bill by all characteristics. If you want a truly balanced system, then have a FLAT tax that everyone pays exactly the same percentage of tax. Making someone that is making more pay a higher rate is neither equitable or reasonable and is flatly not in the spirit of our nation.
"Gallup released their annual state-by-state presidential approval numbers yesterday, and the results should have 1600 Pennsylvania Avenue very worried. If President Obama carries only those states where he had a net positive approval rating in 2011 (e.g. Michigan where he is up 48 percent to 44 percent), Obama would lose the 2012 election to the Republican nominee 323 electoral votes to 215."
Ok Barry....take a seat at the end of the bench...we've seen enough...some people just aren't presidential material.
Well, they can either pass this bill or wait until the system regenerates to the point of people killing people. And yes, it will happen. When you've "hit bottom" and there's no hope in sight, just about anything can happen, and does. I'm not worried about the effect on the stock market or any short term issues. The market will recover over time and a good shake-up would prove beneficial in the long run.
If I were a Republican right now, I'd join the Democrats and make sure it passed too.
So you take away the money that otherwise would have been invested in economy and managed privately (efficiently) and given to the government to be managed inefficiently. The investments therefore will not only be inefficient, but driven by political reasons, such as desire to get re-elected. As a result, the money if invested privately, would in turned have been earned by people who work, as opposed the money given via taxes to the goverment would be given away via politically motivated programs – free housing, welfare checks etc.
Sure, let's layer yet another kludge onto the already overly-complex tax code rather than simply fixing the root problem. This is a prime example of why our laws, and our tax code in particular, are so ridiculously complex.
Why don't they increase the capital gains tax?! Would they make more that way? Especially from millionaires who sometime choose to make a $1 salary. If you doubled capital gains tax, I feel like the amount the US government would get would significantly increase.
It won't pass the House.
To paraphase the movie Animal House:
Harry Reed: " I think that this situation absolutely requires a really futile and stupid gesture be done on somebody's part!"
Schumer, Durban and Whitehouse: "We're are just the guys to do it!"
"Have this administration not taken enough from the already strapped taxpayers yet?"
Oh man those millionaires sure are strapped. They're struggling hard. If the transmission goes out on their seventh BMW, they might not be able to get the replacement completely diamond plated.
Buffett's secretary makes a few hundred thousand dollars a year.
With the buffet rule it is basically putting a floor in their taxes if you make over 1 million a year in investments , when the tax cuts expire and if they expire completely their income tax (without investments) will be 39.5%....and with this tax rate in the Clinton years our country actually saw a bright future and with the top earners reaping the benefits from the policies that lead to the recision this tax rate is long over due to help the ones the lobbyists screwed over...the middle class
A great way to make the case for the bill would be to show annual amounts of these additional funds and how they would impact the debt. If nothing else treat them like the Bush tax cuts and put an expiration date on the increase.
Personally I would sell it like this – we expect our troops to risk giving their lives for our country. Is it too much to ask that the wealthiest among us give more from their pocket books? If we are truly in a national crisis as the GOP/TP likes to infer, how is sacrifice not patriotic?
Hey...It doesn't harm me, so tax away, right? What a bunch of thieves!!!
Even if this passes people will find ways around it. CEOs will get a $999,999.99 paycheck and a $5 million dollar housing allowance or some garbage that won't be taxed. Simplify the system for everyone already and close the loop holes.
I would like a list from the Republicans of "job creators" If all the Billionaires are creating jobs I want to know who they are. Specifically how many jobs has Romney created – unrelated to his campaign of course. Many of the wealthy don't even own a business so how would it stifle job creation!
I can see that the intent of this bill is noble, but there is a concerning part. Since it is going to be tax-dollars, the money goes straight into the Government's hands. This is reflected by the statement that it "... will make billions for the Government...". We already see how effective the Government is at managing it's funds with the $2,000,000,000.00 Tax-Payer dollars unaccounted for in Iraq DoD spending. I can see many politicians voting for this law since it benefits their funding, however there are no actual statements on exactly how it will help the citizens. They don't state that the money received from the increase on the rich will go to food banks or homeless shelters. They don't state that it will go to Federal School GRANTS (screw Fed Loans, they route you just like the banks do) nor do they state it will go to Medicare, Foodstamps or anything that helps the struggling. When you take out the statements that seem appealing, you realize it doesn't truly help the classes at all. All it does is take more money from the rich who then pass the costs down to the poor. High-income Investors make $$$ and must may up to 30% taxes => Governnment takes taxes which goes to Government funds, makes them billions => Then what?? The Bill is noble in nature, but it exists to solely benefit the Government's pocket until it is clearly defined to make sure it helps the struggling and the poor. State where the money is going to, instead of just "the Government".
I am all for fair taxes. Rich pay more? Sure. The 49% that pay nothing pay a little. Sure. Fair tax means everybody has skin in the game. Class warfare means some pay all and some pay nothing. Rich pay more vs some paying none = class warfare.
Trickle down economics - Lie. The rich are job creators - Lie. Raising taxes on the rich will cost jobs - Lie.
Give the $Ms a tax credit equal to one and a holf times the salary per annum for all jobs created and filled for the entire tax period, Then tax capital gains at 25%. Everybody oughta be happy.
Millionaires should have to pay no more than non-millionaires. Why should they be punished for doing well for themselves and their families?
It's about time! Republicans don't understand that you can't just cut, cut, cut without generating revenue. Everyone should have to pay fairly and everyone, especially the rich, should want to! It's our country, after all! I wouldn't want to be rich in a country full of poor people!
Jerry, how would Buffet make millions and millions by saying he wants his taxes raised....stop making excuses and listening to Glenn Beck and wake up.
Why would you penalize someone for being successful? Buffett is a hypocrite... he KNOWS full well that his comparison of his tax rate of ~15% on investment income vs. the ~30% paid by his six-figure WAGE income secretary would create a political crapstorm that would favor the _resident...
Why are successful people suddenly being punished for being successful? So 'community activists with a past to hide' like Obeyme are seen as saviors of America?
Not likely... I've created a wealthy future for my family and successive generation; I don't owe you lazy asses anything. I keep what I earn, and you keep what YOU earn.
Why don't they increase the capital gains tax?! Would they make more that way?
Every time that has been done government revenues from Capital Gains have decreased. It's true. And it makes sense. People have a choice whether or not to make investments. They can either use the money to buy boats and cars and houses and airplanes , etc. or they can invest it and buy boats and cars... with the money they make on that investment. If the money they make on that investment becomes less because the government takes more, then what do you think happens? The idea to invest the money becomes not so attractive anymore. So investments decrease. Quickly.
Makes me wonder if raising captial gains taxes soley on passive income (buying stocks), but retaining the same break for investing in a company directly, such as personally financing projects, thus removing the banks from the picture, and the break only be valid if the company that is invested in creates and maintains a high percentage of employees. In short, reward those companies and their investors that invest in creating more jobs here at home.
Sort of a ramble, but I'm curious how it would work.