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Billionaire Warren Buffett wrote to Sen. Sheldon Whitehouse (D-R.I.) on Wednesday in support of the lawmaker’s bill to charge millionaires a 30 percent minimum tax rate, as Democrats look to spark a debate on taxes and inequality.
“I’m delighted to be identified as a supporter” of the bill, Buffett said in a letter to Whitehouse, according to a release from the Congressman’s office.
“I have no problem endorsing any large step in the direction of greater fairness in the tax code,” Buffett continued.
The idea, which is typically referred to as the Buffett Rule, was put forth by President Barack Obama in the State of the Union address last month when he called for legislation that would require individuals making more than $1 million a year to pay at least a 30 percent tax rate to put them on par with the percentage paid by most middle-class taxpayers.
Democrats are convinced that not only is the issue good policy, but that it it’s a message that appeals to middle-class voters and will help yield important victories in the November elections.
“I’m honored to have Warren Buffett’s support in the fight to create a fairer tax system for middle class families,” Whitehouse said in the release. “Mr. Buffett has long been a champion on this issue, and I look forward to working with him to make sure that all Americans are paying their fair share toward our nation’s success.”
“I’m proud to be working with Senator Whitehouse on legislation that will help level the playing field between middle class families and the wealthiest Americans,” Baldwin said in the release. “For too long, millionaires and billionaires have avoided paying their fair share in taxes. Warren Buffett’s endorsement of the Paying a Fair Share Act underscores its value to our economy and to working families who haven’t gotten a fair deal.”
Their comments come as the White House unveiled a proposal Wednesday reforming corporate taxes designed to reduce the overall tax burden on companies while eliminating politically unpopular loopholes like the corporate jet tax break.
The plan, announced by Treasury Secretary Timothy Geithner, also would eliminate a “carried interest” loophole that allows wealthy Americans, such as former Massachusetts Gov. Mitt Romney, to take advantage of a 15 percent tax rate, far lower than many middle-class Americans pay.
On Tuesday, White House spokesman Jay Carney said that the Buffett Rule was a key element of how Democrats want to revamp the tax code.
“It is a principle for overall individual tax reform,” Carney said. Obama “is calling on Congress to make it a reality within the context of tax reform. The overall principle should be adhered to as we look at issues of the balance we have in our tax code going forward.”
It’s unclear when, or if, Senate Democrats will move forward with an individual tax reform proposal, but Carney said that if they do so this year, the Buffett Rule should be part of the package.
“If they address income tax, individual income tax [this year], then they ought to ensure that the Buffett Rule is made law, if you will, through that practice — through that legislation,” Carney said.
Republicans believe that Democrats are using the issue just to win political advantage. They believe that implementing the Buffett Rule would hurt the economy because it would punish many small-business owners, who tend to file their businesses’ taxes under their own individual taxes.