Tammy Baldwin reintroduces Buffett Rule legislation
Wisconsin's Democratic Sen. Tammy Baldwin reintroduced legislation this week to implement the "Buffett Rule" as part of a tax fairness package.
Baldwin and Sen. Sheldon Whitehouse, D-Rhode Island, introduced a bill that would require multi-million-dollar earners to pay at least 30 percent effective federal tax rate. It would generate an estimated $70 billion in revenue over a decade.
Baldwin was the lead sponsor on a Buffett Rule bill in 2012. The legislation is named for investor Warren Buffett, who has publicly lamented that he pays a lower tax rate than his secretary.
"He pointed out that fundamental unfairness," Baldwin said in an interview. "This particular measure would rein that in, make our tax code more fair. And I think especially when we see people struggling so hard to remain in or attain middle class status, this is a very important policy."
Baldwin said there's "no question" the current tax code is unfair. The opportunity to advance this bill may come when both houses of Congress decide it's time to engage in a larger discussion about tax reform, she said.
The revenue generated by implementing the Buffett Rule could be used to fund other measures that have been proposed — for example, a proposal introduced last session to allow student loan borrowers to refinance their student loans.
The most common argument Baldwin hears against the legislation is that top earners would make other investments if they had a lower tax rate.
Baldwin's response: those people are able to earn such high salaries and receive other pay incentives because "we have collectively made an investment in education, in innovations that spur our economy and in infrastructure that allows people and companies to bring their products to market."
"We have a shared responsibility to maintain those investments," Baldwin said. "It is fundamentally unfair when somebody who makes more than $1 million a year doesn't do their fair share in making those types of investments that advance society."
The legislation would apply only to taxpayers earning more than $1 million, including capital gains and dividends. The 30 percent minimum federal tax rate would apply to those earning more than $2 million.
The bill also includes language to preserve the incentive for charitable giving.
Sixteen Democratic senators signed off on the bill, including Senate Minority Leader Harry Reid, D-Nevada. It is part of a package called the "Paying a Fair Share Act," which also includes legislation targeting offshore tax havens and companies that produce goods overseas to sell in the United States.
Baldwin acknowledged the legislation is not likely to be seen as a priority in the Republican-controlled Congress, but said it's important to introduce it and make it part of the discussion about taxes.
Such a reform would breathe "new life into the American dream, the idea that somebody who works hard and plays by the rules can get ahead," she said.
"How can you do that if you're hard at work but paying a significantly higher tax rate that the millionaires and billionaires find loopholes to get out of?" she added.
