04.26.17

Leahy Joins In Introducing Tax Fairness ‘Buffett Rule’

. . . Paying a Fair Share Act would prevent President Trump from letting the wealthiest Americans pay lower tax rates than middle-class families

On the same day that President Donald Trump unveiled a tax overhaul proposal that would slash taxes for some of the wealthiest Americans and dramatically increase the national debt, Senator Sheldon Whitehouse (D-RI) and Congressman David Cicilline (D-RI) introduced legislation to prevent America’s top earners from paying lower tax rates than middle-class families.  Senator Patrick Leahy is an original cosponsor of The Paying a Fair Share Act, which would ensure that multi-million-dollar earners pay at least a 30 percent effective federal tax rate.  The measure would reduce the federal deficit by an estimated $38 billion over the next decade.

Cosponsoring the bill in addition to Leahy are Senators Elizabeth Warren (D-MA), Tammy Baldwin (D-WI), Cory Booker (D-NJ), Jack Reed (D-RI), Jeff Merkley (D-OR), Edward J. Markey (D-MA), Al Franken (D-MN), Jeanne Shaheen (D-NH), Maggie Hassan (D-NH), Richard Blumenthal (D-CT), Chris Van Hollen (D-MD), and Amy Klobuchar (D-MN), and Representatives Katherine Clark (D-MA), Barbara Lee (D-CA), James Langevin (D-RI), Mark Pocan (D-WI), Jan Schakowsky (D-IL), Louise Slaughter (D-NY) and John Delaney (D-MD).

“Tax reform is a false promise to hardworking Americans unless it’s fair reform,” said Leahy.

“Teachers and nurses in Rhode Island shouldn’t have to pay a bigger slice of their income in taxes than millionaires and billionaires,” said Whitehouse, who first introduced the legislation in 2012.  “This bill would make sure that the wealthiest Americans pay their fair share.  And unlike the President’s reckless giveaway, this legislation would reduce the federal budget shortfall by billions of dollars.”

In 2014, the highest-earning 400 Americans – making an average of $317 million each – paid an average effective federal tax rate of just 23 percent, far short of the top marginal rate of 40 percent.  That is lower than the effective rate paid by the average nurse or social worker in Rhode Island, according to data from the IRS and the Rhode Island Department of Labor and Training. 

The Paying a Fair Share Act would apply only to taxpayers with income over $1 million, including capital gains and dividends, and would phase in over their second million dollars in income.  Taxpayers earning over $2 million would be subject to a 30 percent minimum federal tax rate.  The bill includes language to preserve the incentive for charitable giving.

The “Buffett Rule” is named after Warren Buffett, the legendary investor who has famously lamented that he pays a lower tax rate than his secretary.  Former President Barack Obama proposed adding the Buffett Rule to the tax code to ensure that those at the top pay at least the tax rate paid by middle-class families.  

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David Carle: 202-224-3693