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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Its about time.
Why are some people worried about their investments. This rule specifically said for people who make over 1 million annually from either income or investments. Those who make less wont be taxed at 30%
This won't make it through congress.. not a chance; but this is a good leveraging bill. If Romney wants any hope of beating Obama, then he'll have to support this bill and put it through. If not, then he can kiss his chances goodbye.
Hmmmm. Then there are the folks who don't pay any taxes at all but get refunds and government assistance. The entire tax system is screwed up. What a messed up government we have when the people who pay nothing get something and those who work hard and pay taxes get zinged with even more taxes because they were evil enough to work and make money and create jobs and products for the rest of us. Take away a man's incentive for working hard, promoting growth, new ideas and tech and you wind up like Russia and all the other Commies and Socialistic Countries. Ask them how that all worked out for them? And in the end there were still 2 classes the extremely poor who waited in bread lines for food and the rich who lived high on the hog while the rest of the country starved. I like my chances of obtaining the American dream when the playing field is equal and fair.
Question: Is it too much to much to ask for just a little common ground!
Democrats Good! Republicans Bad!
( JUST VOTE ) November/ November/ November
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Romney made over $21 Million and paid 14% and did not create not 1 job. If your a middle class republican it hurts you to when you pay more the top 1%.
The millionaires are doing just fine and don't forget the Bush tax cuts were supposed to END, they were temporary. Business is sitting on Three Trillion in cash but they've shipped too many jobs overseas. Nobody is against capitalism or success but an overwhelming majority of Americans feel that tax loopholes which (legally) allow millionaires to pay half the tax rate of say a teacher or plumber is unfair and the tax code should be fixed. This proposed change would not affect those earning UNDER $1 million so some senior retiree with $200,000 in a SEP and other than his SS benefit, having no other income, he's not going to pay 30%.
I am for this bill, but it is a band-aid for a sinking ship. It will not raise enough revenue to offset the losses from sending most manufacturing jobs overseas. Bring those jobs back and there will be more middle class tax payers, and fewer poor to pay entitlements to. This bill, plus a tariff on imported goods will encourage job creation here, or raise more revenue to offset some of the costs of having such a large number of unemployed. There would be more jobs for American workers if employers would be held accountable for employing illegal aliens. Our nation's problems are too complex for one simple patch to fix it all.
Finally the perfect answer. The problem is not that the federal government is spending too much. The problem is that they don't have enough to spend. More cash should go to the inefficent federal government instead of where it can do real good. I find it amusing that Romey's 15% is used in this article and by the Libs. However, they forget to mention that his taxes showed that he gave an additional 30% of his income to charity. Riddle me this – If you were Romney (or any other smart millionaire), would you give the feds 30% and still give charity 30% or would you reduce the amount you gave to charities because now the government has decided they are better at determining how to spend your money. Please also tell me what percentage of your income is fair to give to government. The 15% cited was only the feds. He still has to pay state taxes, local taxes and every other dollar they can wring out of him just like the rest of us. Maybe millionaires should have to pay all of their income plus 10% to taxes. That only seems fair. Who would know better on how to spend money than the Federal Government.
It won't, and shouldn't, pass the House. This is just more of Obama's and other Democrats declaring war on the rich. Both chambers and Obama would be better off completely revising the tax code, ridding it of this credit and that deduction.
Anyone notice the article stated it was the best way to reduce the DEFICIT, but not one word on reducing the overall DEBT. In other words, Obama and the Democrats want to continue to spend the same amount, just not borrow as much. That just states the obvious our government has a SPENDING problem. And why should we pay more, so Obama can continue to throw it away on companies like Solyndra?
Raise taxes on millionaires, that's fine. But Liberals still fail to recognize that the problem is not a lack of funding, but an excess of spending. According to this article, dems want to push for this AFTER they have voted for the FAA, Highway, and other spending projects. Quit spending and you won't even have to worry about the current tax rates.
Looks like Obama, Gov. Brown & Mr. buffett are the only ones that know how the economy should work.
How naive can you get. If you decide to punish these guys they can alter things any time they please so their 'income' appears to be whatever they chose. They have other family members, ther companies, non-taxable benefits etc. whcih wil now just be \altered' so they will be 'below the line'. There s nothing that can be doen to them. You can't hurt them. Will always be that way. Don't like it? Well then become one.
Top 50 companies pay no corporate tax or single digit at best. And those same companies receive billions in corporate welfare. GE is the biggest outsourcer of jobs in our history received $1.4 billion YES dollars in subsides while posting record profits. Why?
If Buffet's secretary makes $60K then she is a clown if she is paying 20% income tax....I made $70K with a spouse and three kids last year and my effective tax rate was 2.8% and this is with a standard deduction. Don't people realize that there is a huge difference between effective tax rate (what you really pay after all credits and deductions) and the withholding rate? I think I can save this secretary some serious cash this tax season.
I don't think the bill is designed to raise the capital gains tax to 30% It is worded so that if you make 1 million or over in income from any source, then you pay a 30% minimum.
Let's just tax the rich at 100% and be done with it. They'd only spend the money on foolish things like cars, travel, homes, eating out, investing in businesses and so on, and we all know those things don't create jobs for the middle class. Oh wait a minute...they DO!
I wonder how many jobs Romney created this past year with his low effective tax rate?
Stifle job creation???? It certainly hasn't helped job creation by being low. This is all BULL. Get on with the program.
I agree that this all should be fair!! Let's be like McDonald's every person pays the same for a hamburger. It does not matter what you make. That folks is fair!!! set a flat amount of tax everyone pays for the year and be done with it.
There goes the stock market. You Democrats are clueless. you will raise billions from this, but lose alot more than that when the wealthy pull out of the market and move it overseas or into bonds. whats the point? Is a few billion really going to help? Now that you took the incentive away for them to invest in the U.S stock market, its the guy like me who doesnt make six figures that hurts when my 401k plummets now that theyll pull money out
Increasing DOUBLE TAXATION on money we ALREADY PAID TAX on is STUPID – – WE already PAID TAX ONCE – and TWICE – and HOW MUCH MORE does the Congress want to TAKE from us ? ? Hey – we are using our earning from previous earnings / Investments to PAY EMPLOYEES – – STOP SPENDING CONGRESS – STOP TRAVELLING AND CAMPAIGNING – Let Us Build Small Business On Our Own – -
We would like to see the school economists who corroborate the theory of the repugnant repubs. touting for tax deduction for the super rich to create jobs. Their moronic mumblings and pointless drivel may get support from the Laffer curve evidence and the lackadaisical Larry Kudlow shows.
Of course they fail to mention nobody actually pays the tax rate of their bracket. Everyone gets the standard deduction then you have the earned income tax credit, the making work pay credit, deductions for have kids, daycare and a multitude of other deductions. Nearly 50% don't pay any income tax and a lot of those don't pay THEIR FAIR SHARE of payroll taxes and some of those get a "refund" even if they pay no payroll or income tax.
The only 'FAIR' tax is one that all citizens pay. Maybe that could start at, say, 30k per year taxable income, and have anyone with less pay zero. But with a higher tax on higher earners, all that will do is make it less desirable to become a millionaire in the first place. Less small business investment, less new jobs in those small businesses, and more people dependent on a larger government.
Chances of this getting through the Republican House are nil so this unfortunately is just another partisan party trick. They really have to come up with better names for these bills. They sound like names straight from Ayn Rand's Atlas Shrugged. Who is John Galt?