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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How about cutting spending. The government keeps spending over 1 trillion dollars more that it brings in, this tax will do nothing to alleviate that.
i have never seen such uneducated comments in my life.
Raise capital gains taxes to 30% and see the stock market crash.
Taxes from capital gains has already been paid by the company that paid corporate taxes.
Now they want another 30%?
Seriously you people need to read a book...
So who and how is "Fair Share" determined?
Let's see... the top 1% pay approximately 35% of the country's revenue and the top 2% pay about 50%. And the rest want them to pay more? Really?
The issue is less about revenue than costs associated with government's waste and monumentally failed social programs. In my opinion, everybody, from the top earners to the bottom earners should pay less and fewer taxes. But, then again, roughly 50% of people don't pay income taxes. I presume these are the same people who are complaining that "rich" people – however that's defined – don't pay their fair share.
Obamanation: robbing Peter to pay Paul. Doesn't work. Pretty soon you run out of money and people who have (had) the money leave. Who's gonna pay for the social programs when that happens?
Gurgi – no one is trying to increase capital gains tax from 15% to 30%. This bill is saying that if you earn over a million dollars per year, your overall tax rate should not be less than 30%. A middle class investor like you (that does not earn a million bucks a year) will continue to benefit from capital gains rate of 15%. The idea here is that you likely earn most of your money from other sources where you likely pay 25%, 30% or 35% income tax, unlike the millionaires that earn most there money from investments and end up paying only 15% as things are now.
How much is this supposed to bring in again? Oh, that's right...less than 0.1% of the debt. The Federal Government INCREASES spending EVERY YEAR by more than this bill brings in. This is just a feel good, political ploy for those that hate millionaires. You want a real solution? CUT SPENDING! Unless someone here shows me by the numbers how we can tax our way to a balanced budget (not even reducing the debt, just balancing the budget), the problem will always be spending!
I believe one of the objectives is to simplify the tax code by removing the loopholes that allow millionaires to pay a lower percentage.
Paying the fair share is only fair if it applies to everyone equally. It is not fair to tax one group one percentage and another group another. How is it FAIR to charge a different amount? Did someone change the defenition of the word?
Who cares about taxes when Americans are starving for food. Disability in America is nearly a death sentence and social security is no better. I am glad the government took my money for years of dedication and hard work and has moved me from middle class to poor class. By the way the Buffet Rule is at least a start in the right direction. By the way Income taxes were started to pay off World War 2. I can't be positive, but I am sure we have paid for that war by now. At this time, with the war paid for, taxes are illegal in the United States anyway.
Why is this so tough. 9% flat tax and forget the income tax and slap a 30% tariff on imports from China.
If anybody on this board makes more that 1 million dollars annually...you are not middle class...thats just my opinion. If you make less than 1 million dollars annually then this rule will not apply to you.
The tax rate is for people making over $1 million, which in my world is definitely NOT middle class.
99%'er here. Far from being a millionaire. In fact, I seriously doubt that I will ever come close to being worth one million dollars in my lifetime.
That being said, why should the federal govt benefit from the risks taken by investors.
I say if you invest and lose, you don't get to write it off. If you invest and win, you don't have to pay taxes at all.
Why should one person profit over the risks of another?
I'm also for capping income taxes on the first 40 hours per week of employment only. And I get paid salary so I don't get overtime anyway.
But again, why should the feds get more of YOUR money when you are the one working harder? If you want to help the lower and middle class you can start right there. After all, the ones working overtime and getting paid hourly wages are clearly the lower and middle class.
If the Democrats want to spout off about fairness then they need to go all the way. Why stop at just taxing the millionaires.
And if Buffet really cares about the middle class then he can give his fortune to the IRS to help alleviate some of the problems with our debt and deficits.
Do you realize that you are probably paying close to 30% now and that is partially due to millionaires paying 15% or less? I think it is very kind of you to be concerned for them, but rest assured they will be OK without you paying their share.
Hmmmm.... the DNC is playing politics once again. So by wording it that millionaires pay less rate they willfully lie regarding the actual dollars. Let me help. Lets say Buffet's secretary earns $60,000 and pays lets say 20%. She then pays $12,000 in taxes. Now lets say Buffet makes only $1 billion at lets say 10%. Buffet already pays $100 Million.
This is just another backhanded attempt at socialism for the left.
The chances of this getting through the house are slim to none.
If anything, a higher capital gains tax would motivate investors to put more money into the market in order to offset the reduced returns.
Risk-reward is not a confusing concept and that's what is going on here. If the risk of losing my money on an investment is greater then I want more reward for making that investment. However, if my reward is going to be reduced because the government is taking more away, I will choose to invest only in less risky places. My investments by definition will decrease because the slightly more risky investments are not attractive anymore. (I'll just take another vacation with it.)
I love it! It's only fair. However, 25% for all would be even better.
Why are they wasting time! There is no way the Republican house will pass this and they know it. They blame the Republicans for wasting time, but the Democrats are just as guilty.
Well, the Democratic Robin Hoods want to spread the wealth. Wow, and when the democrats get more money and spend three times as much, then what? And when this country is so far in debt, nearly there now, and the economy is so messed up because of the democrats leadership, we all will loose. Long live the Obama administrations class warfare, don't be stupid America, if this keeps up, our entire society will be a welfare state, and the American dream will be no more. Keep spending people, and take from others that which is not yours, it will come back around in the end, that you can count on, and the Democrats are depending on it, you have been fooled.
People do realize this is more for show than actually solving anything correct? Lets see here 500 million raised against trillions still owed? Yup that really comes closer to solving the national debt problem. Why don't senators and congressional leaders actually take a look at serious issues and start solving them instead of saving their jobs by appealing to pointless rhetoric.
This is strictly a political move pandering to the lazy masses who want more freebies from Obama. Even it passed it would be of little benefit to the middle or lower class.
Does the Buffet Bill also require Berkshire Hathaway to pay their back taxes>?
1% of americans already pay 40% of all taxes. What's our fair share? Please give me a number. I'm a family of only 4. How many more families should I pay for in this country to do my fair share? 200? 400?
Maybe all those people here seething that it's time for the rich to "pay their fair share" should ask what would be their own fair share. After all, there is the ugly fact that 47% of you pay less than zero taxes. But I'm sure that seems fair to you.
Not to worry – after a few years of the inflation we're heading into, you'll all be millionaires, and you'll all be paying a minimum of 30%.
Incidentally how exactly is that going to work? Obviously the bill can't just impose no lower limit on people who make $0.99M per year and 30% those who make $1M. So there will also have to be a minimum imposed at lower levels. How low? We'll, to make a difference to the federal deficit problem that would have to be like, say, as low as what some significant fraction of the population makes. Basically anyone who works hard.
What, you think you work hard? Not if you're making the low $40k median U.S. income. You can get that for having pulse. Working hard only applies to what you do after you come home from you're day job. Sorry, that's just the way it is. You can't expect to be and work average and earn an above average income. Unless you're a rapper, I guess.
I will gladly pay the tax. Although the people I will lay off from my business will not like it! I will get the money from what I would have paid those folks who work for me now. My quick math says I will probably layoff about 6 people out of my 75 employees. Oh well, at least this millionaire will pay more!!!!,