Building off President Barack Obama’s State of the Union push for tax fairness, Sen. Sheldon Whitehouse (D-R.I.) plans to introduce legislation this week that would require millionaires to pay at least a 30 percent tax rate.
“Clearly, this has been out of balance for a while, and I have been working on legislation to correct that,” Whitehouse said in a conference call today.
Democrats believe upper-income earners have been the beneficiaries of tax policies — implemented by Republicans — that help the wealthy at the expense of the middle class.
Democrats also believe that tax fairness is a winning issue politically, as they begin to campaign in earnest ahead of the November presidential election.
Obama in his annual address to Congress last week called for legislation that would require a minimum millionaire’s tax. The proposal is not new, however. In September, Obama had proposed the “Buffett Rule.” Named for billionaire investor Warren Buffett, the rule holds that individuals making more than $1 million a year should pay at least the same percentage of their earnings as middle-income taxpayers.
But the new push by Obama and Whitehouse to implement the Buffett Rule comes on the heels of Mitt Romney’s decision to release his tax returns. The GOP presidential contender and former Massachusetts governor paid a roughly 14 percent tax rate on income of between $190 million and $250 million because most of his income came from investments, which are taxed at a lower rate.
Under Whitehouse’s bill, which he expects to introduce Wednesday, a line would be added to the tax form and “if your income is over $1 million, you multiply it by 0.3, and if that number is bigger than what you otherwise would be paying, pay that,” Whitehouse said.
Whitehouse said it was unclear when the bill would come to the floor, but he intends to look for any opportunity that may arise.
“I have not yet had those discussions” with Democratic leaders, Whitehouse said. “I think step one is to file the bill, get the Joint Committee on Taxation scoring on it and see who we have for initial sponsors, and that, I think, will have a lot to do with the leadership’s position on this.”
“Obviously, this has been highlighted by the president’s State of the Union speech and so I think that puts us in a much better position than we were beforehand,” Whitehouse continued. “But, nevertheless, I’d be well-served to have those ducks in a row before I went to [Senate Majority Leader Harry Reid] and asked for floor time on this.”
Whitehouse said he has a growing list co-sponsors.
He noted that it may be too late for the measure to be included in a package that would extend the payroll tax break through the end of the year.