by Karl Stark | April 17, 2012
The U.S. Senate on Monday defeated the Buffett Rule, which would ensure that tax rates for millionaires and billionaires are not lower than the rates middle class families pay. The legislation, S. 2230, gets its name from billionaire investor Warren Buffett, who pays a lower effective tax rate than his secretary.
Yesterday, hours before Senate Republicans defeated the measure, Vice President Joe Biden came to its defense in a heart-felt speech at the White House.
“Being American is about being fair,” Biden began, noting that the Buffett Rule would get “everyone in the deal” and make sure everyone is playing by the “same set of rules.”
Of course, the wealthiest Americans are supposed to pay higher rates than the rest of us — the basis for the United States’ progressive tax system is that everyone pays their fair share. At least, that’s how it’s supposed to work. But in 2009, 22,000 households earning at least $1 million annually paid less than 15 percent of their income in income taxes — and 1,470 managed to pay no federal income taxes on their million-plus-dollar incomes.
Nearly one-quarter of all millionaires face a lower tax rate than the rate workers earning between $50,000 and $100,000 are facing. They get away with it by exploiting loopholes in the tax code, such as one that that allows Wall Street tycoons to write off their wages as “investments,” or another that permits deductions for luxury yachts that are large enough to serve as second homes.
Yesterday’s vote on Buffett Rule legislation was an attempt to remedy these ridiculous loopholes by imposing an effective tax rate of 30 percent on households earning more than $2 million, then slowly applying the same rate to households earning more than $1 million. AFSCME has joined with more than 100 other organizations to make progress to ensure that top earners pay their fair share.
Vice President Biden put it like this: “This is not chump change, man. This is peoples’ lives... [Republicans] just don’t get it, but we better damn well get it.”
To read AFSCME’s letter to the Senate supporting the Buffett Rule, click here.