Labeling President Obama’s proposal to raise the effective tax rate on Americans earning more than $1 million a year as an election year gimmick, Tennessee Sens. Lamar Alexander and Bob Corker cast their votes against the Paying Fair Share Act of 2012, otherwise known as the Buffett Rule, Monday.
A measure to open debate on the proposal was blocked by the Senate in a 51-45 vote. For months, the president had argued that middle-class families should not have to pay a higher percentage on their taxes than the nation’s most affluent. The rule’s name is derived from recent complaints from billionaire investor Warren Buffett regarding the 15 percent tax rate on invested income currently imposed on wealthy Americans.
Following the vote, both senators issued statements saying that revenues generated by the tax would not be enough to put a dent in the national deficit. Calling the measure “counterproductive,” Corker said the rule was a political exercise not intended to deal with deficits, but to divide.
“There’s tremendous bipartisan consensus building toward pro-growth tax reform that eliminates loopholes so we can lower everyone’s rates, simplifies the tax code and broadens the base, and the Buffett tax would move us in the opposite direction and be highly counterproductive,” Corker said. “What we need to move the economy into high gear is pro-growth tax reform accompanied by a plan to restore the solvency of Social Security and Medicare and reduce the long-term deficits.”
Suggesting the plan would not bring about real tax reform, Alexander cited recent estimates by the Congressional Budget Office and the Joint Congressional Committee on Taxation, which calculated the rule would bring in approximately $46.7 billion in revenues over 10 years.
“This is a disappointing and cynical smokescreen,” Alexander said. “Since the top 1 percent of taxpayers already pay 37 percent of federal individual income taxes, the Buffett Rule would generate revenues of less than 1 percent of the new debt projected under the president’s 10-year budget.”
Tennessee Democratic Party Chairman Chip Forrester countered the senators, issuing a statement directed at Corker that criticized the senator for “standing on the side” of millionaires and billionaires.
“The Buffett Rule won’t by itself put America’s fiscal house in order, but it’s a step in the right direction,” Forrester said. “It sends a clear message that we need to make sure all Americans are paying their fair share and that to create true middle-class security, we can’t just cut our way to prosperity.”