Senate Republicans blocked a bill promoted by the Obama administration that would impose a minimum tax on millionaires.

The bill to institute the so-called Buffett Rule failed to overcome the 60-vote threshold needed to advance in the Senate. The bill, proposed by Senator Sheldon Whitehouse, D-R.I., and named after billionaire investor Warren Buffett, would have required millionaires and billionaires to pay a minimum tax of 30 percent. The Paying a Fair Share Act of 2012 received a vote of 51 to 45.

“It is inexcusable that a multi-million-dollar earner can pay a lower tax rate than a Rhode Island truck driver,” Whitehouse said after the vote. “Today’s vote on the Paying a Fair Share Act took us one step closer to ensuring that middle-class families across the country get the straight deal they deserve.  Although we were unable to break the Republican filibuster, a majority of the United States Senate has gone on the record in favor of greater fairness in our Tax Code.  I’ll keep fighting to make the Buffett Rule law.”

Whitehouse’s Paying a Fair Share Act would ensure that multi-million-dollar earners pay at least a 30 percent effective tax rate. It would apply only to taxpayers with income over $1 million—including capital gains and dividends.  Taxpayers earning over $2 million would be subject to a 30 percent minimum federal tax rate and the tax would be phased in for incomes between $1 million and $2 million. The bill also included language to preserve the incentive for charitable giving.

The Joint Committee on Taxation has estimated that the bill would generate $47 billion in new revenue over the next decade under current law, or $162 billion if the Bush tax cuts for the wealthy are extended.  In Monday evening’s vote, one Republican—Susan Collins of Maine—joined with 50 Democrats in supporting the bill.

Most Republicans were firmly opposed to the bill and labeled it a case of political maneuvering.

“What about the way government spends the money it gets from taxpayers makes anybody think they’d do a better job with the money they hope to get from this tax?” said Senate Minority Leader Mitch McConnell, R-Ken. “It’s completely ludicrous. I mean, until Washington can show that it’s a better steward of taxpayer dollars or that it knows how to invest in a winner, it shouldn’t expect people to hand over another penny.”

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access