April 17, 2012 in Nation/World

‘Buffett rule’ bill derailed in Senate

Alan Fram Associated Press
Tax rates compared

On average, the wealthy already pay higher income tax rates than those who make less.

People making $1 million or more annually paid an average effective rate of 25 percent last year in federal income and payroll taxes that finance Social Security and Medicare, according to the nonpartisan Tax Policy Center, a Washington group that studies taxes. Those earning $50,000 to $75,000 paid an average effective rate of 12 percent, the group said.

WASHINGTON – Senate Republicans derailed a Democratic “Buffett rule” bill Monday that would have forced the nation’s top earners to pay at least 30 percent of their income in taxes, using the day before Americans’ taxes are due to defy President Barack Obama on one of his signature election-year issues.

By a near party-line 51-45 tally, senators voted to keep the bill alive but fell nine votes short of the 60 needed to continue debating the measure. The anti-climactic outcome was no surprise to anyone in a vote that was designed more to win over voters and embarrass senators in close races than to push legislation into law.

At the White House, Obama denounced the vote, saying Republicans chose “once again to protect tax breaks for the wealthiest few Americans at the expense of the middle class.” In a statement issued after the vote, he said he would keep pressing Congress to help the middle class.

“It’s just plain wrong that millions of middle-class Americans pay a higher share of their income in taxes than some millionaires and billionaires,” he said.

Republicans called the measure a divisive Democratic distraction that would not address the economy’s real woes.

“This legislation will do nothing with regard to job creation, with regard to gas prices, with regard to economic recovery,” said Sen. Jon Kyl of Arizona, the No. 2 Senate GOP leader.

Democrats’ goal, he said, was “to try to draw attention away from the issues that the American people are most concerned about.”

Sen. Susan Collins of Maine was the only Republican to join Democrats in voting to keep the measure alive, arguing that it was a way to begin considering a badly needed, broad revamping of the entire tax code.

The lone defecting Democrat was Sen. Mark Pryor of Arkansas, who said making the rich pay a fair share of taxes should occur as part of an overall tax overhaul, “not as a political ploy meant to score points.”

The Senate vote was on a measure by Sen. Sheldon Whitehouse, D-R.I., that would impose a minimum 30 percent income tax on people making over $2 million yearly and phase in higher taxes for those earning at least $1 million. The measure is nicknamed for billionaire Warren Buffett, who has called for higher taxes on the rich.

Monday’s vote was the first time a “Buffett rule” proposal has come to a Senate vote this election year, though Democrats have tried unsuccessfully in recent months to impose modest surcharges on the income of the wealthy.

The Senate measure would raise $47 billion over the coming decade, barely enough to notice against the roughly $7 trillion in budget deficits expected over that period. Administration officials have conceded that by itself it would do little to trim those shortfalls, instead emphasizing its fairness.

“The administration believes that continuing to allow some of the wealthiest Americans to use special tax breaks to avoid paying their fair share simply cannot be justified,” the White House said in a written statement.

Campaigning in Philadelphia, Republican presidential contender Mitt Romney ridiculed the Buffett rule, telling a tea party audience in Philadelphia the revenue it would produce would fund the government for only about 11 hours. Obama generally says the proposal is to make sure the very wealthy do not pay an abnormally low tax bill, and doesn’t advocate it as a source of significant federal revenue.

© Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

There are 52 comments on this story. Click here to view comments >>

Get stories like this in a free daily email