Millionaires still paying a smaller tax share than secretaries
After billionaire Warren Buffett argued that the tax system shouldn't allow households making more than $1 million per year to pay a smaller percentage in tax than what middle-class families have to pay, President Barack Obama supported imposing what's come to be known as the Buffett Rule.
It would increase taxes on people who make a lot of income from long-term capital gains and qualified dividends, which are taxed at a lower rate than ordinary income.
Obama's 2014 budget proposal called for changing the law so millionaires pay no less than 30 percent in taxes on their after-charitable-contributions income.
The plan was embraced by Republicans with as much enthusiasm as the threat of an audit from the IRS.
Obama proposed it again in his 2016 budget, but it hasn't gone anywhere. In this Congress, it's not going to.
Spokespeople for both House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell, both Republicans, said there's no chance. "That tax hike has bipartisan opposition," said McConnell spokesman Don Stewart. "It's been defeated in the past, and it will not be passed in the lame duck."
Roberton Williams, senior fellow at the nonpartisan Tax Policy Center, agreed.
"It's not going to happen. Congress will not consider tax increases before the end of Obama's term. They don't have to. There's no reason they're going to do it," he said. "He will get a new Congress for two and a half weeks — they come in at the beginning of January and he doesn't leave office until the 20th — but I don't think that's going to happen unless he gets a super, super, super majority. If that's the situation, he'll leave it to President (Hillary) Clinton. If it's not the situation, with President Trump, you know that's not going to happen."
During Obama's tenure there have been some tax increases on the rich, Williams said, but those have not have come close to the scale of what passage of the Buffett Rule would have done.
We rate this Promise Broken.
Email, Don Stewart, spokesman, Senate majority leader Mitch McConnell, Sept. 23, 2016
Email, AshLee Strong, press secretary, House speaker Paul Ryan, Sept. 23, 2016
Interview, Roberton Williams, senior fellow, Tax Policy Center, Sept. 23, 2016
Michigan Law, "Taxing Dividends and Capital Gains: Effect on the Super-Rich and Retirees," undated, accessed Sept. 23, 2016
Proposal is mentioned in Obama's 2014 budget
In his reelection campaign, President Barack Obama promised to address what he said was a glaring inequality in the tax code -- the fact that some rich people pay lower tax rates than their employees.
Named "the Buffett rule" after the billionaire Warren Buffett, the White House website explains the goal as "no household making more than $1 million each year should pay a smaller share of their income in taxes than a middle class family pays.” During the campaign, Buffett noted in an New York Times op-ed that he paid "only 17.4 percent of (his) taxable income,” a "lower percentage than” any of his 20 employees.
Obama took the first steps on this promise with his 2014 budget proposal, which was introduced April 10, 2013.
The budget says on page 36 that Obama is seeking "a specific proposal to comply with the Buffett Rule, requiring that wealthy millionaires pay no less than 30 percent of income—after charitable contributions—in taxes (that) will prevent high-income households from using tax preferences, including low tax rates on capital gains and dividends, to reduce their total tax bills to less than what many middle class families pay.”
Although, there is no guarantee that this proposal will be integrated into the congressional budget -- particularly in the Republican-controlled House of Representatives -- this is a start for the proposal and enough for us to move the meter to In the Works.