(Washington, D.C.) – Today, U.S. Senator Patty Murray (D-WA) released the following statement after Senate Republicans filibustered the Paying a Fair Share Act, also known as the “Buffett Rule.” This bill would call on millionaires and billionaires to pay a minimum fair rate so they can’t use loopholes and gimmicks to pay lower rates than many middle class families.
“It’s truly a shame that Senate Republicans are so committed to protecting the rich from paying a penny more in taxes that they won’t even allow us to debate a bill that makes sure millionaires and billionaires are playing by the same set of rules as middle class families.
“At a time when middle class families continue to struggle, it’s only fair to call on the wealthiest Americans to pay just a bit more toward their fair share.
“Without the Buffett Rule, the wealthiest Americans are able to work with their accountants to find and exploit every loophole in the book to bring down their rate and reduce what they owe. So when they get to that bottom line on the tax form, many of the people making the most money end up paying substantially lower rates than most working Americans.
“On the other hand, many of our nation’s teachers, police officers, and construction workers—the middle class families who don’t have access to all those loopholes and shelters—will pay a larger percentage of their incomes. And that’s simply not fair. The wealthiest Americans should be playing by the same set of rules as every other family.
“We all know that our country has serious debt and deficit challenges. And it’s not going to be easy to get our budget back on track. But I feel very strongly that everyone needs to share in the sacrifices. We can’t simply ask the middle class and most vulnerable families to bear this burden alone—the wealthiest Americans need to be a part of this solution too.
“The Buffett Rule wouldn’t solve all of our problems—we would still have a long way to go before the wealthiest Americans are paying their fair share. But it is a smart step, it’s a fair step, and once again, it really shouldn’t be controversial.
“So I am going to keep fighting for the Buffett Rule and I hope Republicans will join us and eventually allow this common-sense change to be enacted.”
Background on Paying a Fair Share Act:
At a time when the share of national income flowing to the top one percent of people in America has climbed to levels last seen in the 1920s, those same people are also paying taxes at one of the lowest rates in 50 years. Warren Buffett, one of the richest men in the world, famously pays a lower effective tax rate than his own secretary. He’s not the only one. The 400 highest earning Americans in 2008, who each made an average of $271 million, paid an average effective federal tax rate of just 18.1 percent. At the same time, a married couple making $70,000 paid a rate of 25 percent. The Paying a Fair Share Act (a.k.a., “The Buffett Rule”) seeks to restore balance and fairness to the tax code by making sure no millionaire pays a lower tax rate than middle-class Americans.
The Paying a Fair Share Act (S.2230) creates a minimum tax rate of 30 percent for filers with annual earnings over $1 million. The rate is phased in for taxpayers earning between $1 million and $2 million. The bill maintains the tax deduction for charitable giving.
- The Buffett Rule is Targeted. The legislation will only impact taxpayers with taxable incomes over $1 million who are not paying a minimum tax rate of 30 percent. Of the 144 million tax returns filed in 2010, less than 500,000 (0.1 percent) of taxpayers had taxable incomes over $1 million. And the legislation will exempt over 99 percent of all small businesses. According to a study by the U.S. Treasury 99 percent of Taxpayers who own small businesses earn less than $1 million. [New York Times, 9/20/11; Department of the Treasury, Office of Tax Analysis, 8/11]
- The Buffett Rule Restores Tax Fairness. The 400 highest-earning Americans in 2008, who each made an average of $271 million, paid an average effective federal tax rate of just 18.1 percent. At the same time, a married couple making $70,000 a year paid a rate of 25 percent [IRS]
- The Buffett Rule is Fiscally Responsible. According to the Joint Committee on Taxation, the Buffett Rule could reduce the deficit by anywhere from $47 billion to $162 billion over the next decade. The final savings figure will largely depend on Congressional action pertaining to the expiring 2001 and 2003 tax provisions at the end of 2012. [Joint Committee on Taxation]