The Buffet Rule is Just the Beginning

Last August, Warren Buffett, the billionaire chairman and chief executive of Berkshire Hathaway, made an unusual demand in a New York Times op-ed: Tax me more. “While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks…My friends and I have been coddled long enough by a billionaire-friendly Congress,” wrote Buffett, who proposed raising tax rates on those making more than $1 million, and an additional rate increase on those earning more than $10 million.

At the State of the Union in January, President Obama proposed legislation that would do just that. He called on Congress to enact the Buffett Rule, a law that would tax richer Americans – those earning at least $2 million -- at a rate of at least 30 percent.

This week, the administration launched a campaign to promote the bill before an April 16 vote to decide if the Senate will debate the bill or not.
But a campaign for a fairer tax code has a side benefit: It’s the perfect ammo against likely GOP candidate Mitt Romney, who, according to the New York Times, paid a 13. 9 percent tax rate on $21.7 million in income in 2010.
In a mass email today, James Kvaal, the national policy director for Obama for America, calls the Buffett Rule debate “ a perfect example of the choice in this election.
Right now, some millionaires and billionaires are paying a lower tax rate than their secretaries.

President Obama wants to fix that with the Buffett Rule, which would ensure that people making more than $1 million a year can't get special deals to pay a lower rate than many middle-class families. It's an important part of his plan to reduce our deficit, pay for investments in programs to help our economy grow, and make the middle class stronger…

…When it comes to our broken tax system, Romney is proposing additional breaks for the folks in the very highest brackets (folks like him, incidentally). He'd pay for them by cutting programs that invest in the middle class and help grow our economy, and by gutting Medicare and Social Security.”

Romney's Communication Director, Gail Gitcho, responded to the Obama campaign in a press release today:

"President Obama is the first president in history to openly campaign for re-election on a platform of higher taxes. He has already raised taxes on millions of Americans, but he won’t stop there. He wants to raise taxes on millions more by taxing small businesses and job creators. We appreciate the Obama campaign reinforcing Mitt Romney’s platform of lowering tax rates across the board in order to jumpstart this bad Obama economy.”

With the Obama campaign’s publicity push and Mitt Romney’s pushback, the Buffett Rule will likely get a lot of attention in the coming weeks. But according to New America’s Asset Building Program, several other aspects of our tax code deserve time in the limelight, too: Income tax rates are far from the only part of the tax system that’s reinforcing inequality among lower-income Americans. On Wednesday, the Assets Program will publish a report that breaks down the most flawed parts of the current U.S. tax and spending policies,  and explains how those rules exacerbate wealth and income inequality.  Stay tuned for more on the report later this week.

Photo credit: Kim Kyung Hoon / Reuters