The crusade to make rich people pay more taxes marches on after the U.S. Senate on Monday decided to cut off debate but not to bury the “Buffett rule” proposed by President Obama.
Warren Buffett, one of the world’s wealthiest men, became the namesake for the legislation after saying it was unfair that he paid a lower tax rate than his secretary. Then the president called on Congress to do something about tax inequity. Chances are the politicians won’t do much of anything except focus more attention on the issue of fairness – which is the real point as the nation’s voters prepare to decide in November either to keep Obama in office or replace him with a Republican, most likely Mitt Romney.
Whether a requirement for millionaires to pay at least 30 percent of their income in taxes would have an appreciable impact on the national deficit and debt is debatable. Last year an Associated Press analysis said just 1 percent of people earning more than $1 million in 2009 had managed to pay no federal income taxes at all. The Tax Policy Center found most millionaires were already near the Buffet rule standard, sending an average 29.1 percent of their income to Uncle Sam. Households with lower incomes generally paid lower tax rates.
Romney, campaigning Monday, laughed off the Buffett rule, saying the additional taxes it might produce would amount to about 11 hours of funding for government operations. However, the Republican contender should realize that fairness is no laughing matter for voters struggling to keep their heads above water. He’s already received negative publicity over his efforts as a consultant to help business clients save their bacon at the expense of employees’ jobs and pensions. Fairness does matter.
The Chicago Tribune reported a recent survey determined 72 percent of Americans like the Buffett rule. Democrats and urbanites were big supporters while tea party adherents and other conservatives were less than enthusiastic about the idea. The poll further established that the percentage of low-income taxpayers who consider their tax bills unfair is on the rise – a trend that could work against Romney and raise Obama’s stock. Yet, the first Gallup poll of the general presidential election campaign showed 47 percent of the nation’s registered voters support Romney. Obama had 45 percent backing. It’ll be a tough fight between the sharply divided candidates.
Republicans probably hope the fairness push will yield to pragmatism once voters perceive their candidate offers solutions that are more apt to restore the general economy to sound footing. “This (Buffett rule) legislation will do nothing with regard to job creation, with regard to gas prices, with regard to economic recovery,” said Sen. John Kyl, R-Arizona.
Even one Democrat, Sen. Mark Pryor of Arkansas, said the fairness movement should be part of a comprehensive tax overhaul, not a political gimmick.
But the Obama administration isn’t backing off its insistence that the wealthy contribute more. The president paid more than 20 percent of his income in taxes last year while Romney, based on what information he’s been willing to provide, was closer to 15 percent.
Republicans make the case that even if economically successful taxpayers do pay lower rates – on capital gains and dividends – high earners often are in positions to create jobs and sign paychecks. If taxed more heavily, the argument goes, they’ll do less hiring.
Expect to hear much more of the same over the next seven months.