Obama to step up push for ‘Buffett Rule’ as Tax Day approaches
With Tax Day a week away, President Obama is turning up the volume on his call for “tax fairness,” a central part of his campaign message and a weapon Democrats hope to use against Republicans in Congress.
In a speech in Florida on Tuesday, Obama is slated to restate his argument that the rich should pay at least 30% of their income in taxes, a principle dubbed the “Buffett rule” after billionaire investor Warren Buffett, who has said that he pays a lower percentage in income taxes than his secretary.
Obama’s remarks will set the stage for a Senate vote on the Buffett rule on Monday, the eve of Tax Day. The legislation is all-but certain to be blocked by GOP senators, who claim the rule is a campaign-year gimmick that could hurt small businesses and harm the economy.
But Democrats are eager to spotlight the issue, particularly as millions of Americans prepare their taxes and are more than normally aware of how much cash is leaving their pockets. In a coordinated effort, the president’s campaign and congressional Democrats plan to launch web tools, ads and fresh attacks on the issue against Republicans, including likely president candidate Mitt Romney.
White House spokesman Jay Carney on Monday said that it was “unfortunate” that none of the GOP presidential hopefuls back the Buffett rule.
To bolster its case, the White House is releasing a new report aimed at painting a portrait of inequities in the tax code. Of those making more than $1 million a year in 2009, 22,000 households paid less than 15 percent of their income in income taxes, the report said. Nearly 1,500 paid no federal income taxes, according to IRS data.
The reason the very rich can pay lower rates than many less affluent Americans is largely because they earn much of their income through investments, which are taxed at a lower rate than wages. Imposing a 30% floor would largely effect those who have the means to restructure their income and finances to avoid income taxes, said Jason Furman, an economist at the White House’s National Economic Council.
The report did not detail how much new revenue would be generated by the Buffett rule. The Joint Committee on Taxation, a congressional committee, puts the figure at about $47 billion over a decade, a drop in the bucket when it comes to trimming the $1.3 trillion annual deficit.
But White House officials argue the rule is a principle that should guide tax reform and an issue of basic “fairness,” rather than a solution to the deficit.
It has also become a way to remind voters about Romney’s own tax rate -- roughly 14% of his income in 2010.
On Monday, campaign manager Jim Messina cited news reports that Romney had “millions of dollars of his personal wealth and investments funds set up in notorious tax havens like the Cayman Islands,” and $3 million in a now-closed Swiss bank account. He labeled Romney out of touch.
Romney’s campaign issued a preemptive rebuttal on Monday, saying the contrast between the candidates on taxes couldn’t be clearer. Obama wants to raise taxes on top earners. Romney wants to lower tax rates.
“We appreciate the Obama campaign reinforcing Mitt Romney’s platform of lowering tax rates across the board in order to jump start this bad Obama economy,” said Romney campaign spokeswoman Gail Gitcho.
Your guide to our new economic reality.
Get our free business newsletter for insights and tips for getting by.
You may occasionally receive promotional content from the Los Angeles Times.