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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Never will pass.
Which is a shame.
How about a flat tax for all types of income? Liberals usually hate that idea. Conservatives usually love it. But isn't what Obama's proposing (raise tax rates on the rich, who currently pay less than the middle class) closer to a flat tax than what Romney/co. is proposing (cut cap gains and corporate taxes, leave middle class taxes the same...aka...cut taxes for the rich)?
Seems to me if you're a conservative flat tax type, then you're for Obama.
The first responder said he is a middle class investor who will be hurt by this bill. Well, sorry to hurt your feelings, but millionaires aren't part of the middle class. This bill isn't supposed to hurt people, it's supposed to make sure millionaires pay their fair share.
Through some of the strongest economic periods in the United States, the upper-class had tax rates of 70% and higher. It did not stifle job creation, the economy was strong. This is as recent as the 1970's.
The argument about paying fair taxes will stifle job growth is another of the long list of Republican lies meant to drive our middle-class into poverty-stricken servitude to the rich. There is a class war alright, and it is being waged by the rich onto the lower 90%.
Seriously? Dividends and capital gains are already taxed at the corporate level before they are distributed/realized by actual people. Additionally, it is galling that folks talk about the "greed" of some and then demand 40-50% of what they've earned. I'm a Democrat-leaning independent and think this whole discussion smacks of a sanitized version of what we see of looting during riots...
When asked in an interview if he realized that raising capital gains taxes would actually REDUCE revenue to the federal government Obama said yes but that didn't matter. It just isn't fair. They are not doing this raise revenue. They are doing this to punish success.
This theory that when rich have more money they invest is a bunch of bolony. If that is the case then, with the Tax breaks for the rich in the Bush era, we would be in this situation. One of the main reason for the huge deficits is the war in Iraq and the tax breaks.
During the time of Margette thatcher, she followed the same thinking and gave huge tax breaks for the rich. The rich took that extra money and traveled the world. One of the most popular "buys" was villas in southern spain. It didnt do a darn thing for the British economy. And Briton never recovered after that!!!
Fact is the CBO said yesterday federal taxes will increas some 30%(so will municipals, and states) as old tax laws expire(president Bushes) over the next few years. This really means almost everyone will pay more taxes. This is just ANOTHER OBAMA scam to appease the far left (his only supporters), taxing the wealthy that is.
The CBO (non-partisian), yesterday, also put the real unemployment rate at 10% (probably really 18%, including those who quit looking for work). The CBO said it will take six years for the economy (employment) rebound...and this is because of the federal debt and increasing taxes (taking tax $ from the economy).
NOW, KNOWING ALL THIS, WHY WOULD ANYONE ASK OBAMA TO STAY FOR ANOTHER TERM? Our only hope is private sector job growth..period! These phoney mortgage givaways, obamacare, union appeasement is all vote buying retoric. How can you reasonably expect a career politician/community organizer to help create private sector jobs? Only one in six newly created American corp jobs are domiciled in the US now...mostly because of the current federal policy and mistrust...it will take a real strong business leader to fix this...not a radical marxist ideolog. I have not even goten into the foreign policy mess and the very dire seriousness of obama's failures there and how these (middle eastern and african) disasters can effect our futures...
@fourandthedoor: millionaires will still invest and investment will not decrease because income on investments will STILL be considerably more than investing in things or having it sit in a bank vault or under a mattress. Income from market investments will always be more attractive than any alternative.
"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."
Umm would it be too obvious for me to point out that your statement contradicts itself? I.e. "The government [spends] more than it brings in," followed by, "....this tax will do nothing to alleviate that." In other words, you're saying that "bringing in" more money won't have any effect on the fact that the government isn't bringing in enough money. Nice.
I can't see why capital gains on investments shouldn't be taxed as an income..? For all intents and purposes thats just what it is. Many countries already have this system and they're doing quite well. I can also see that this will cool down the stock market since the investments would need to be better made to offset the extra taxing. This means that more investments would look at longer term investments thus giving more stability to the market. However, this will render some investment banker without a job. But there are enough dodgy ones out there the world would be better of without, some sort of natural cleansing.. All in all I believe this is the right way to go.
The Obama Administration was all about CHANGE. That is right 48% of the people are below poverty line. The Obama's administration is a money lawndering administration. Send your reporters to investigate a new red truck plate 13 REG at 11820 Lark Song Loop, Riverview, Fl., out of the PGA Pro Timothy J. Sereikis Trust Fund, with Bank of America. -$20,000.00 last quarter, plus all the minus with new air conditioners, roofs, ktichens, etc. Obama is under the table and so is his administration. I only have a part time job, without health insurance and fractured back ribs that float and heave my entire rib cage and the Obama money lawndering machine is lawndering with buy a vote with gifts herein Hillsborough County, Summerfield, Riverview, Florida. Investigate this and you will know the truth!
It's funny how CNN and the Dems,Pres make it sound like Buffett's Sec is in the middle class when she isn't she makes over $200,000 a year being his Sec. She has 2 houses. thats not the middle class. Oh and buy the way why don't you start reporting fairly the law is 15% tax. That is what Romney and Obama and all the other millionaire senate DEMS and Repubs pay by law. CNN doesn't say either that Romney gave 7+ million to chairites compaired to Obamas 1 million so whos greedy.
- hrough some of the strongest economic periods in the United States, the upper-class had tax rates of 70% and higher. It did not stifle job creation, the economy was strong. This is as recent as the 1970's.
The argument about paying fair taxes will stifle job growth is another of the long list of Republican lies meant to drive our middle-class into poverty-stricken servitude to the rich. There is a class war alright, and it is being waged by the rich onto the lower 90%
It is not surprising to see the libs supporting the proposals of a multi-billionaire to make him richer.
Numbers are manipulated to prove whatever you wish. But who really pays the MOST in taxes? It's the rich, not the middle class and poor. I want to pay the MOST in taxes, because that means I earn the most! Half of our population pays no income tax at all, so is that fair? I vote for the FAIR tax, which is based on spending, not income. Get rid of the INCOME TAX totally!
Illinois raised taxes 67% last year to help pay their bills, keep unfunded union retirement funded and avoid addressing medicare/medicade cuts. Well, with the tax increase they are back, taxes were not enough, pensions are unfunded by 85 billion dollars and debts the state owes to contractors and suppliers have not been paid for over a year and cost over 35 billion.
Obama wants to do what Illinois has proven will fail, raise taxes in everything you can find and when you continue spending like a mad man your problems will grow. At some point you will find that spending is your problem.
Mr. President, just cut to the chase and tell us when we are getting your go ahead for the lynching of anybody making more than minimum wage.
Booseyboo – spending bills must originate in the house. Since this isn't a tax cut (which is spending), but an increase, should be fine to start off in the senate.
And why shouldn't someone earning $1M or more pay a rate similar to my tax rate? A major portion of stock market investment capital comes from middle class investors putting money into their 401k accounts. Just because a CEO earns most of their total compensation in stock shouldn't give them a way to pay less tax than I do.
This bill is dead on arrival. This is pure politics by the Democrats. Class warfare. Blame the job creators for the problems of the low wage (or no wage) earners. The problem with this is if you over tax these high income people they will just stop investing it or invest in in tax friendly investments, maybe out of the country. The Dems know this but it resonates with those who are ignorant (i.e., those who claim to be the 99% but really aren't). If the 99% was really the 99% then we would be Soviet Russia or China where there is no opportunity for anyone.
@Joe, so slovenly pigs just roll in their money? If that was the case, then they have the same mental problems that are exposed on "Hoarders." However, if they just blow their money on other things...then the people invest in those thing-making companies, not to mention the workers at those thing-making plants, get to enjoy the fruits of the slovenly pigs' efforts/effluvia. What, economically speaking, is the downside of letting the slovenly pigs spend like there is no tomorrow on overpriced watches, luxury cars, and spray-on tans?
"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?"
Yes, really. You conveniently left out the fact that the top 1%; who, as you complained, pay 35% of the taxes (which is incorrect, btw; the number is actually 23% according to published figures (Business Insider, 2010)), control 33.8% of the country's wealth.
So, let's do a little math here. The top 1% have 34% of the nation's wealth but only pay 23% of the taxes. Hmmmm.... Gee, I wonder why that would lead people to believe they're not paying their fair share....
typical congress. they are missing the root cause, the tax code. it needs to be simplified, updated and corrected.
stop with the band-aid "fixes". fix the problem.
Beware of the fox in the "hen-house!" Government is not designed to save money, it is designed to spend the calculated tax base. Tax dollars are used to pay the INTEREST on the government borrowed money, thus tax revenue will NEVER reduce debt. Durable goods, a product that has value, is the only thing to reduce "debt", thus stocks and bonds, etc have no "value", they produce nothing; they are only ink on paper, contrived value, ones and zeros. Jobs are only created when demand for goods are present. Become educated into what really "makes" the system work.
Romney says that he is not concerned about the poor.
Well, I am much less concerned about millionaires.