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With a nod to the November elections, Senate Democrats on Monday began what they promised would be a recurring effort this year to boost taxes on millionaires to address what they argue is an unfair tax code.
“Today, the wealthiest 1 percent takes home the highest share of the nation’s income since the early ’20s, the roaring ’20s,” Majority Leader Harry Reid (D-Nev.) said on the Senate floor. “But while their bank accounts have grown, their tax bills have become smaller. The wealthiest Americans pay the lowest tax rate in more than five decades.”
Sen. Charles Schumer (N.Y.), head of the Senate Democrats’ policy and communications shop, said on a conference call with reporters that he believes Democrats have the upper hand in the debate.
“The GOP fears this debate because there is an emerging contrast in Congress,” Schumer said. “Republicans want to give even further tax breaks to millionaires and billionaires, while we think the very wealthy should share in more sacrifice so the burden doesn’t fall on the middle class.”
Senate Republicans, led by Minority Leader Mitch McConnell (Ky.), argued that the Democrats’ move is evidence that they are seeking to score political points rather than legislate. They oppose the effort because, they say, it would raise taxes on small businesses and make them less likely to hire — something they contend would hurt the already weak economic recovery.
But the partisan posturing was just that, given that on Monday evening the Senate defeated 51 to 45 a measure from Sen. Sheldon Whitehouse that would require millionaires to pay at least a 30 percent tax rate.
The Rhode Island Democrat argued that would be more in line with the tax rates middle-class workers pay. It was no coincidence that the vote came the day before federal income taxes are due.
The bill would pass the “Buffett Rule,” which President Barack Obama has made a centerpiece of his tax policy and his re-election campaign. The rule is named for multibillionaire investor Warren Buffett, an Obama supporter, who raised concerns about his tax rate versus his secretary’s.
The two pay different rates because Buffett makes a larger part of his income from investments, which are taxed at a lower rate than other earned income, such as wages.
But while the measure was defeated, Schumer said Democrats would continue to revisit the issue ahead of the elections.