02.01.12

Leahy Joins New Effort To Apply ‘Buffett Rule’ Fairness To U.S. Tax Code

WASHINGTON (WEDNESDAY, Feb. 1) – Senator Patrick Leahy (D-Vt.) Wednesday joined in introducing legislation to apply the so-called “Buffett Rule” to the U.S. Tax Code.  The Paying A Fair Share Act would apply a minimum 30 percent income tax rate for taxpayers with adjusted gross incomes above $1 million. 

The bill mirrors a proposal President Obama called on Congress to approve in his State of the Union message last week, to implement what the President termed the Buffett Rule, named for successful Nebraska investor Warren Buffett, who has lamented the fact that his secretary pays a higher effective tax rate than he does. 

Leahy said, “While hard-working Vermont families and small businesses are struggling to make ends meet in a difficult economy, tax fairness has continued to erode, benefitting the wealthiest one percent at the expense of the rest of the country.  By now a large proportion of millionaires pay a smaller percentage of their income than do a large share of moderate-income taxpayers.  As we grapple with large budget deficits worsened by the Bush tax cuts and two wars overseas, it is just common sense that those who have benefitted the most shoulder their fair share of the burden.” 

Under current tax law, loopholes and special provisions allow some of the wealthiest individuals to pay lower effective tax rates than do middle-class families.  For example in 2008, the wealthiest 400 Americans – making an average of $270 million each – paid an average effective federal tax rate of just 18.2 percent.  As a result many millionaires and billionaires are paying lower tax rates than America’s working families pay.

To maintain the incentive for charitable giving, the new bill would permit wealthy taxpayers to continue to receive a credit equal to the value of the charitable contributions deduction under the regular income tax.

Chief sponsor of the new bill is Senator Sheldon Whitehouse (D-R.I.), and both Leahy and Senator Bernie Sanders (I) are cosponsors.

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