‘Buffett rule’ fails in Senate
Republicans block effort to raise taxes on wealthy
WASHINGTON — The Democratic-controlled Senate failed on Monday to reach a supermajority needed to pass a tax plan offered by President Obama to require millionaires to pay a 30% minimum effective tax rate.
The 51-45 defeat of the “Buffett rule,” named after billionaire investor Warren Buffett, fell mostly along party lines. The bill needed 60 votes to move forward. Sen. Susan Collins, R-maine, was the only Republican to vote with Democrats, while Arkansas Democrat Mark Pryor sided with the GOP.
Senate Republicans criticized the bill as an election-year ploy by the president who has been campaigning on a message that all Americans should pay their “fair share” in order to help balance the budget. “For him, it’s not about jobs or the economy. It’s about his idea of fairness, about imposing it on others,” said Senate Minority Leader Mitch Mcconnell, R-KY.
Democrats, including Senate Majority Leader Harry Reid, D-nev., countered that wealthy Americans are currently enjoying some of the lowest tax rates in modern history. “This unfair system has turned the gap between the richest few and everyone else into a gulf,” he said.
The White House proposal was named for Buf- fett after he publicly called last year for a tax code that does not allow the wealthiest of Americans to pay a lower effective tax rate than the middle class, which is currently possible because of how tax rules apply differently to money made off of investments vs. money earned through a pay check.
Democrats support the Buffett rule as part of a broader effort to raise taxes on the wealthy to help close the nation’s budget gap. Republicans have resisted any standalone effort to raise taxes as a way to do that, arguing that it would choke off investment and job growth. The White House estimates that the proposal would affect about 450,000 taxpayers. Outside estimates say the proposal could raise $37 billion-$50 billion annually in additional revenue, a small amount when compared to the federal debt which is currently more than $15 trillion.
A Gallup Poll released April 13 showed that 60% of Americans support the Buffett rule, while 37% oppose it. The strength of public support for it comes from Democrats and independents, underscoring why Obama sought a vote on the proposal as he makes the case for his re-election.
The U.S. House will counter Democrats this week with a bill by Majority Leader Eric Cantor, R-VA., for a one-year, 20% small-business tax cut for businesses with fewer than 500 employees, which accounts for almost all businesses. It is expected to pass the House, but not the Senate.
However, the two bills show competing views on tax policy and provide a preview of the debate Congress and the White House will have to have over the Bush tax cuts, which expire Dec. 31.