Statement Of Senator Patrick Leahy On Applying 'Buffett Rule' Fairness to The U.S. Tax Code
Statement As Prepared For Delivery
Mr. President, I rise today in strong support of the Paying a Fair Share Act, which would apply the so-called “Buffett Rule” to the U.S. Tax Code. This commonsense bill would ensure that taxpayers at the top of the economic ladder pay at least the same tax rate paid by hardworking middle-class families. No longer should handsomely compensated CEOs or those who live off trust funds pay a lower effective tax rate than the people who work for them.
It is remarkable, and regrettable, that such a principle of tax fairness should evoke controversy. It is more regrettable still that opponents have reflexively erected a supermajority barrier in an effort to prevent even a debate on this straightforward principle.
I am pleased to join Senator Whitehouse and others as a cosponsor of this bill, which mirrors President Obama’s call for requiring a minimum 30 percent income tax rate for taxpayers with adjusted gross incomes above $1 million. The Buffett Rule would ensure that those at the top of the economic ladder pay at least the tax rate paid by middle-class families. It also would reduce the deficit by $47 billion dollars over the next decade.
While hardworking 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 overseas wars, it just makes sense that those who have benefitted the most should shoulder a fairer share of the burden.
Over the past decade, multi-millionaires have benefited the most from the Bush-era tax cuts – a foolish, harmful choice, which I voted against, that helped to quickly squander not only balanced budgets but also record surpluses. Too many wealthy individuals and corporations are now able to abuse and take advantage of the complexities in our tax code in ways that minimize their responsibilities, while many hardworking Americans and small businesses continue to struggle. Recent reports which indicate that such firms as Goldman Sachs paid no Federal taxes last year should trouble everyone.
Warren Buffett, one of the wealthiest people in the world, noted in a New York Times op-ed article last year that he paid taxes on only 17.4 percent of his taxable income – a lower percentage than was paid by any of his 20 employees, which ranged from 33 to 41 percent of their income. He also pointed out that in 1992, the top 400 wealthiest Americans paid Federal taxes of 29.2 percent, but by 2008, those 400 Americans paid Federal taxes of only 21.5 percent, despite the fact that their aggregate income rose to $90.9 billion over that time period. Finally, despite these lower tax rates for the wealthiest Americans, job creation over the past decade has been far lower than the period between 1980 and 2000, when tax rates were higher.
And we need not just take Warren Buffett’s word for it. The nonpartisan Congressional Research Service studied these claims and confirmed Mr. Buffett’s assertion that a large proportion of millionaires pay a smaller percentage of their income than a significant proportion of America’s working families.
With Tax Day upon us, it is past time or Congress to end these loopholes and special provisions that allow some of the wealthiest individuals to pay lower effective tax rates than do middle-class families.
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Press ContactDavid Carle: 202-224-3693
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