Today is the day that most Americans are required to file their taxes. (Not Mitt Romney, of course, who has filed for an extension…) Thanks to President Obama and a strong push from fair-minded progressives, this requirement has sparked a lot of conversation about tax fairness and tax rates. Billionaire Warren Buffett also helped lead the charge, making a recommendation which has come to bear his name: The Buffett Rule. This would require that anyone making more that $1Million in a year would be required to pay a minimum tax rate of 30%. This proposal is wildly popular, polling at over 70% approval, including support from many of the people who would be required to pay the higher rate. Senate leader Harry Reid brought forward the Buffett Rule for a vote yesterday. It was denied cloture along mostly party lines missing the 60 votes required to move to a vote on the matter itself.
Why is the Buffett rule necessary? Sadly, the complex tax laws make it easier for people with large incomes to shelter money, engage in deductions, and take advantage of loopholes. A typical one- or two-income family making $60,000 or less per year simply doesn’t have the fiscal diversity to make the most aggressive use of the tax code. As President Obama noted this weekend, his secretary, whose income is less that 12% of the Obamas’ income for 2011, pays a higher tax rate because of the way the code works. This is wrong.
Why else is it necessary? It is, as the wonderful Elizabeth Warren reminds up, part of the social contract. Making vast sums of money requires the support (willing, intentional, or otherwise) of the whole of society. Paying that back is a reasonable request. It is also true that income inequity forces a larger tax burden on households headed by women and people of color. Of course the loudest voices in the Republican party disagree. The Ryan budget does nothing to address this inequity. Candidate Romney, who refuses to share more than one year’s worth of his tax papers with the country he wants to lead, is also a vocal opponent. Anti-tax goblin Grover Norquist, of whom many Republican legislators live in fear, is adamant in his opposition.
Ironically, as the President has pointed out, this isn’t a new plan:
I’m not the first President to call for this idea that everybody has got to do their fair share. Some years ago, one of my predecessors traveled across the country pushing for the same concept… So this President gave another speech where he said it was “crazy” — that’s a quote — that certain tax loopholes make it possible for multimillionaires to pay nothing, while a bus driver was paying 10 percent of his salary. That wild-eyed, socialist, tax-hiking class warrior was Ronald Reagan.
But of course 21st Century Republicans in Congress can’t be bothered with inconvenient things like history, or facts…