Setting the stage for a ‘Buffett Rule’ showdown

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Eight months ago, Warren Buffett, chairman and chief executive of Berkshire Hathaway, wrote an op-ed for the New York Times headlined, “Stop Coddling the Super-Rich,” a group that included, of course, the author of the piece. The column turned out to be one of the most important op-eds of the year – it gave rise to the proposed “Buffett Rule.”

The point is pretty straightforward, and at first blush, a simple matter of fairness: proponents of Buffett Rule want to correct a flaw in the existing tax system: thanks to various loopholes and giveaways, very wealthy Americans can end up paying a much lower tax rate than working families. It’s a problem President Reagan described as “crazy” during his second term.

A quarter-century later, Reagan’s party no longer agrees, and Republicans have opposed any and all efforts to correct the tax imbalance. Democrats, meanwhile, aren’t letting this go.

In his weekly address, delivered over the weekend, President Obama helped set the stage for the coming fight.

For those who can’t watch clips online, Obama explained that Buffett “is paying a lower rate than his secretary.”

“That’s not fair. It doesn’t make any sense. Do we want to keep giving tax breaks to the wealthiest Americans like me, or Warren Buffett, or Bill Gates – people who don’t need them and never asked for them? Or do we want to keep investing in things that will grow our economy and keep us secure? Because we can’t afford to do both.

“Now, some people call this class warfare. But I think asking a billionaire to pay at least the same tax rate as his secretary is just common sense. We don’t envy success in this country. We aspire to it. But we also believe that anyone who does well for themselves should do their fair share in return, so that more people have the opportunity to get ahead – not just a few.

“That’s the America I believe in. And in the next few weeks, Members of Congress will get a chance to show you where they stand. Congress is going to vote on what’s called the Buffett Rule: If you make more than $1 million a year, you should pay at least the same percentage of your income in taxes as middle class families do.”

When it comes to Congress approving the Buffett Rule, Democrats have low expectations. But given the electoral context, they’re nevertheless eager to get every member on record.

And that’s going to happen, at least in the Senate, fairly soon.

The Hill reported that Senate Majority Leader Harry Reid (D-Nev.) has already begun the procedural steps to line up the vote in the chamber two weeks from today.

Senate Majority Leader Harry Reid (D-Nev.) will file for cloture Thursday and set a vote on the so-called Buffett Rule, which would raise taxes on those making more than $1 million annually.

A Senate leadership aide told The Hill that Reid plans to vote on the rule on April 16.

In case this isn’t obvious, the fight has sweeping implications. For the Senate, Democrats are eager to put Republicans, especially vulnerable GOP incumbents like Scott Brown and Dean Heller, on the spot, testing their willingness to fight for tax loopholes that benefit millionaires and billionaires.

But there’s also the presidential race, in which the likely Republican nominee, Mitt Romney, is extremely wealthy thanks to a successful career as a vulture capitalist. Romney takes full advantage of the existing loopholes, allowing him to pay a 13.9% rate on the millions he receives every year from the firm at which he no longer works.

The question for congressional Republicans, then, is whether they support tax fairness or whether they want to keep allowing Mitt Romney to pay a much lower tax rate than America’s middle class.

Buffett Rule, Mitt Romney and Barack Obama

Setting the stage for a 'Buffett Rule' showdown

Updated