‘Buffett Rule’ Fails to Take Flight

The Buffett Rule drew a near-party-line vote last Monday, April 16, 2012. Named after billionaire Warren Buffett, the measure proposed that high earners pay at least 30% in federal income tax. Warren Buffett publicly commented he pays a lower tax rate than his secretary. Hence, the measure carries his name as an example.

The vote was split 51 for the measure with 45 opposed. In order to advance, 60 votes are needed. Democratic Senate candidates are trying to stir up support using Facebook ads and Google themself to promote its passage. An online petition is even in circulation.

However, Republicans caution “it is a bad idea to raise taxes on investors and job creators, especially in a fragile economy” (Bendavid, N. (2012, April 17). ‘Buffett Rule’ Tax Proposal Fails in a Senate Test Vote. The Wall Street Journal. pp. A4.).

Obama issued a statement on the counter-attack where he criticized Republicans for “choosing once again to portect tax breaks for the wealthiest few Americans at the expense of the middle class” (Bendavid, N. (2012, April 17). ‘Buffett Rule’ Tax Proposal Fails in a Senate Test Vote. The Wall Street Journal. pp. A4.). Clearly, this is a partisan issue. Senators seem to want to use tax policy as a way to promote their party’s arguments ahead of the fall election.

Currently, the top marginal tax rate is 35% but many high earners pay a much lower rate. In fact, there are 1,470 families making more than $1 million a year that pay absolutely no federal income taxes. Although the Republicans and Democrats in the Senate seem to be fairly well divided on the issue, 60% of the American voters said in polls that they support raising taxes on millionaires.