The nation’s annual tax filing deadline this week should focus attention on Monday’s vote in the Senate on the “Buffett rule,” President Obama’s proposal to require Americans with annual incomes of $1 a million or more to pay a minimum of 30 percent in income taxes. The rule is eminently fair: A lot of non-millionaire earners have to pay the top income tax rates of 25-to-35 percent, yet the super-rich often pay less than half that due to lower rates on to capital gains, dividends and other sheltered investments. Because politics takes precedence over tax fairness, however, Republican senators will probably defeat the Buffett rule with a filibuster.
Obama and the Senate’s Democrats surely expect this outcome. Their point is to emphasize that Republicans continue to thwart measures to bolster tax fairness for America’s working families, even as they wrap themselves in the banner of family values. The GOP’s lockstep opposition the Buffett rule, named after its chief citizen advocate, mega-billionaire investor Warren Buffett, is an apt example.
Buffett has argued widely that it’s wrong for his secretary — and many Americans generally — to have to pay a much higher percentage of their income in federal income taxes than he and many other multi-millionaires and billionaires pay. As Buffett laments, they typically escape with effective income tax rates of 15 percent (the tax rate on dividends) or less.
Mitt Romney, the likely Republican presidential nominee, is among the super-rich in this category. He disclosed in January that he paid just 14 percent in federal taxes on his $21 million income last year. Unfortunately, he thinks that’s fine. If he wins the presidency in November, he proposes to continue cutting taxes on the rich while further slashing the nation’s already crippled budget for education, health care and entitlement programs like Social Security and Medicare.
Romney’s formula would further deprive the federal government of needed revenue and deepen the deficit, even as it would send an ever-greater share of the nation’s wealth to the most affluent one percent, and especially the super-rich in the top tenth of the top one percent in earnings. This group already scoops up a larger share of the nation’s income than they have had in the last 80 years.