In a fairly predictable move Monday, the United States Senate failed to get the necessary votes to bring the Paying a Fair Share Act, the official title for a bill popularly known as the “Buffett rule,” to a vote. The measure, which would create an alternative minimum rate of taxation for millionaires, is a popular measure according to most polling, but the 51-45 vote meant that Democrats failed to get the 60 votes necessary to bring the bill to a vote.
Partisan Bill Enjoys Popular Support
That the bill failed to come to a vote in an election year should come as a surprise to no one. What’s more, even if Democrats could get the bill to a vote, avoid a filibuster, and pass the bill, it seems very unlikely that the Republican dominated House would pass the measure. However, actually passing the bill may never have been the intent. Most polls show strong popular support for the measure and Democrats are most likely trying to set themselves up for an issue they can campaign on this fall. A CNN/ORC poll from this last weekend showed 72 percent of likely voters supporting the measure, including 90 percent of Democrats, 69 percent of independents, and 53 percent of Republicans.
However, the rhetoric on Capitol Hill was essentially as expected.
“Most people have heard enough about this president’s notion of fairness,” said Senate Minority Leader Sen. Mitch McConnell (R, Kentucky). “To most people, what’s fair about America is that they can earn their success and expect to be rewarded for it.”
Democrats, though, pushed back, insisting that their efforts were genuine and that they believed passing the Buffett Rule, named for Berkshire Hathaway’s (BRK.A) Warren Buffett, was a realistic goal before November.
“We’ll keep pushing this issue all year long,” said Sen. Charles Schumer (D, New York) on a conference call. “We think that the very wealthy should share in more sacrifice.”
The White House also chimed in before the vote, releasing a statement saying “Continuing to allow some of the wealthiest Americans to use special tax breaks to avoid paying their fair share simply cannot be justified.”
Quality Bill?
The value of the Buffett rule may be largely political, as it hasn’t received great support from tax experts or economists. The rule would only affect about 0.1 percent of Americans, a small enough slice that it wouldn’t represent a major shift in tax receipts. The rule would mean an additional $47 billion in tax revenue over the next decade should the Bush tax cuts expire as scheduled at the beginning of 2013. However, should the tax cuts be extended across the board, something that’s relatively unlikely unless Democrats lose the Senate, the rule would mean an additional $162 billion over that same decade. In both cases, the amount of money is dwarfed by the considerable size of the US deficit.
The Buffett rule emerged last year when Warren Buffett wrote an essay in which he pointed out that, because of the way the tax code is structured, he was paying a lower tax rate than his secretary. Republicans, meanwhile, will make the argument that the lower rate of taxation on capital gains and dividends that allow for people like Buffett to pay a lower tax rate are part of a calculated effort to increase investment in the economy and create more jobs.
“It [reflects] a deliberate decision to encourage new investment in the economy,” said Ron Portman (R, Ohio).
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