The Senate on April 16 rejected, by a 51-to-45 margin, a procedural motion with a 60-vote threshold to take up a Democrat-backed bill (the Paying a Fair Share Bill of 2012 (Sen 2230)) that would levy a minimum 30-percent tax rate on the adjusted gross incomes of households earning more than $1 million annually. The so-called “Buffett Rule,” was named after the billionaire investor Warren Buffett who famously complained that he paid a lower tax rate than his secretary and the government should fix the situation.
Senate Majority Leader Harry Reid, D-Nev., said prior to the vote that the measure would “restore fairness to a system that has favored the interests of the wealthy for too long.” He cited a recent poll that showed that nearly three-quarters of Americans believe millionaires and billionaires should contribute more. He also pointed out that the bill would impact less than 1 percent of small business owners and would maintain the deduction for charitable giving. “And, it would be a small but important step toward restoring fiscal responsibility as our nation makes difficult choices about where to spend and what to cut,” said Reid.
President Obama spent the past week pressuring Senate Republicans during public appearances to vote for the bill (TAXDAY, 2012/04/12, W.1), calling it necessary in order to create a fair and equitable tax system. But Senate Republicans rejected that argument, charging that the president’s notion of fairness was a campaign stunt that would do little to address the economic crisis facing the country. “This entire debate has been very illuminating for a lot of folks,” said Senate Minority Leader Mitch McConnell, R-Ky. “It’s revealed a lot about this president. By wasting so much time on this political gimmick that even Democrats admit won’t solve our larger problems, it’s shown the president is more interested in misleading people than he is in leading.”
In a Statement of Administration Policy supporting the measure, the White House claimed that Sen 2230 would “address that most basic source of unfairness by limiting the degree to which the most financially fortunate can take advantage of tax expenditures and preferential rates on certain income.”
Following the vote, Reid introduced and started the legislative process for a small business tax break bill, the Small Business Jobs and Tax Relief Bill, which would provide a temporary income tax credit for increased payroll and extend bonus depreciation for an additional year.
By Jeff Carlson, CCH News Staff
Statement of Administration Policy on Sen 2230 –Paying a Fair Share Act
JCT Estimated Revenue Effects of Sen 2230, the Paying a Fair Share Act, JCX-33-12
Text of the Small Business Jobs and Relief Act