Sen. Sheldon Whitehouse, D-R.I., has introduced legislation to implement President Obama’s proposal in his State of the Union speech that millionaires should pay at least a minimum 30 percent income tax rate.
The proposal, known as the “Buffett Rule,” is named after billionaire Warren Buffett, who has argued that millionaires and billionaires should not pay lower tax rates than their secretaries. Buffett’s own assistant was in the audience during the State of the Union address, and TV cameras showed her reaction during that part of the speech.
Whitehouse’s bill, dubbed the Paying a Fair Share Act, is co-sponsored by Senators Daniel Akaka, D-Hawaii, Mark Begich, D-Alaska, Richard Blumenthal, D-Conn., Tom Harkin, D-Iowa, Patrick Leahy, D-Vt., Bernie Sanders, I-Vt., and Chuck Schumer, D-N.Y.
“It’s time to give middle class families in Rhode Island and across the country the straight deal they deserve,” said Whitehouse, who began drafting the legislation several months ago. “As we continue working to restore our economy, it’s more important than ever to make sure all Americans are paying their fair share toward our nation’s success – and right now that just isn’t happening. It’s inexcusable that our tax system permits ultra-high income earners to pay a lower tax rate than a truck driver or a janitor, and this legislation would help fix that unfair system.”
Whitehouse noted that the top 400 earners in America paid an average effective tax rate of just 18.2 percent in 2008. His proposed legislation would apply only to taxpayers with income over $1 million, including capital gains and dividends. Taxpayers earning over $2 million would be subject to a 30 percent minimum federal tax rate. The tax would be phased in for incomes between $1 million and $2 million, with those taxpayers paying a portion of the extra tax required to get them to a 30 percent effective tax rate. The bill also includes language to preserve the incentive for charitable giving.
The legislation is expected to reduce the deficit by tens of billions of dollars, and is currently awaiting an official estimate from Congress’s Joint Committee on Taxation.
