Dimantha Andrahennady ’14:
Despite Republican criticism that the “Buffett Rule” casts an unfair burden on the upper class, the rule is effective and necessary because it closes up tax loopholes, increases national income, and decreases the ever-widening class gap. In 2011, well-known investor Warren Buffett expressed his concern and disapproval that he was paying less in income taxes than his secretary (17.4 percent as compared to his secretary’s 35.8 percent, according to ABC news). Recognizing that tax loopholes and the capital gains tax allow wealthier people to pay less taxes than the middle class, he proposed the “Buffett Rule,“ which was supported by President Obama and the majority of Democrats in the Senate. This rule calls for everyone to pay an appropriate amount of taxes based on income and will make sure that no household making more than one million dollars pays less taxes than the middle class. In April of this year, this proposal advanced into the senate as US Senate Bill S. 2059, Paying a Fair Share Act of 2012 but was blocked by Republicans. Although the bill failed to pass, the “Buffett Rule” has led to increased debate over possible inequities in the American tax system.
Senate Majority leader Harry Reid said, “The wealthiest one percent has taken home the highest share of the nation’s income since the early ’20s.Times are tough for many middle class American families. Millionaires and billionaires aren’t sharing the pain or the sacrifice. Last year, there were 7,000 millionaires who didn’t pay a single penny in federal income taxes. The “Buffett Rule” proposal fixes this problem, as it would tax the wealthiest Americans and rake in $47 billion dollars over ten years, reducing the national deficit and helping the middle class. President Obama, a key advocate of the “Buffett Rule,” is employing this rule as ammunition against his opponent Mitt Romney. According to Democrats, Romney is just one of many who took advantage of tax loopholes, paying just 13.9% for his 21.7 million dollar income in 2010. According to CNN Polls, 72 percent of Americans support the “Buffett Rule” and approve taxation of the wealthy at 30 percent.
Nevertheless, Republicans have offered ample criticism for this bill. As Republican senator John Kyl stated, “You’ve got the top 10 percent of taxpayers paying 70 percent of all the taxes and earning 45 percent of the income. Those are certainly the wealthy and they’re certainly paying a big share. How about the less wealthy? The bottom 95 percent…pays 41.3 percent of income taxes and earns 65 percent of the money. Is this fair?” However, Senator Kyl’s argument is flawed because he only takes into account how much the rich are paying based on overall national taxes and income, and does not acknowledge differences in individual income.
Republicans also dislike the “Buffett Rule” because lower taxes on the rich are supposed to lead to greater investment and more jobs. However, it is unfair for the middle class to pay a higher tax rate than millionaires, who earn money through investments, which are taxed at a lower rate. Moreover, the opposition claims Obama is giving the rest of the country a “free ride.” However, this accusation is inaccurate. The “Buffett Rule” does not lower taxes for the middle and lower classes but only assures that wealthier citizens are taxed at a higher percentage than the rest of the country.
Although Republicans seem to think otherwise, the “Buffett Rule” is beneficial, lessening the widening class gap and reducing the national debt. Republicans argue that the top five percent of the country pays for 43 percent of the country’s income taxes; however, it is much easier for the top one percent to generate income through corporate business than for the middle and lower class to do so through working class jobs. Therefore, Republicans and Democrats must place aside their differences and work together on a compromise so that that “Buffett Rule” can take effect.