The Buffett/Romney/Reagan Rule


It’s generally called the Buffett Rule – a proposal to close an existing loophole that allows some millionaires to pay a special lower tax rate than most of middle-class families. It’s named, of course, after billionaire Warren Buffett, chairman and CEO of Berkshire Hathaway, who, as you may have heard, has a secretary who pays a higher tax rate than he does.

Rachel joked on the show last night, “I think it might stick better with people if they call it the ‘Romney Loophole’ rather than the Buffett Rule.” That certainly makes sense – Mitt Romney pays a 13.9% rate on the millions he receives every year from his former vulture-capital firm, despite the fact that he left Bain Capital several years ago.

Today, President Obama had an entirely different name in mind (thanks to reader F.B. for the tip).

For those who can’t watch clips online, Obama said this morning:

“I’m not the first president to call for this idea that everybody has got to do their fair share. Some years ago, one of my predecessors traveled across the country pushing for the same concept. He gave a speech where he talked about a letter he had received from a wealthy executive who paid lower tax rates than his secretary, and wanted to come to Washington and tell Congress why that was wrong. So this president gave another speech where he said it was ‘crazy’ – that’s a quote – that certain tax loopholes make it possible for multimillionaires to pay nothing, while a bus driver was paying 10 percent of his salary. That wild-eyed, socialist, tax-hiking class warrior was Ronald Reagan.

“He thought that, in America, the wealthiest should pay their fair share, and he said so. I know that position might disqualify him from the Republican primaries these days but what Ronald Reagan was calling for then is the same thing that we’re calling for now: a return to basic fairness and responsibility; everybody doing their part. And if it will help convince folks in Congress to make the right choice, we could call it the Reagan Rule instead of the Buffett Rule.”

I don’t imagine the change would help – though it’s fascinating in its own right that there are no differences between Reagan and Obama on the issue – but it does pose an additional challenge to the proposal’s conservative detractors, many of whom are already struggling to come up with a rationale to explain their opposition.