The House on Wednesday passed Republicans’ own version of the Buffett Rule, which allows wealthy Americans to voluntarily pony up to reduce the deficit.
The bill, labeled the Buffett Rule Act, passed by voice vote, meaning Democrats and Republicans agreed with it. Under the legislation, which would still need Senate approval, taxpayers could check a box on their taxes and send in a check for more than they owe to the IRS.
“If Warren Buffett and others like him truly feel they’re not paying enough in taxes, they can use the Buffett Rule Act to put their money where their mouth is and voluntarily send in more to pay down the national debt, rather than changing the entire tax code to inflict more job-killing tax hikes on hard-working Americans,” said Rep. Steve Scalise, the Louisiana Republican who wrote the bill.
President Obama and Democrats had proposed a Buffett Rule tax, based on billionaire investor Warren Buffett’s statement that he shouldn’t pay a lower rate on his income than his secretary.
Investments are taxed at a lower rate than salary or wage income under the theory that they are spurring economic growth, so wealthy investors usually pay less as a percentage, though they end up paying far more in real dollar terms.
Democrats said there should be a minimum tax for the wealthy, which would mean investors would pay more. They proposed a 30 percent tax on those with incomes higher than $1 million a year.
Republicans, though, objected to rewriting the tax code on Mr. Buffett’s say-so, and said he is free to pay more if he wants.
Current law already allows taxpayers to send money to pay down the debt, but Republicans said that process is onerous. Under their new plan, taxpayers would have an easy option on their tax returns allowing them to pay more.
Under Republicans’ legislation, the money would go directly toward reducing the debt.
Democrats didn’t object to the bill, but said it did a disservice to the real Buffett Rule tax.
“There’s nothing wrong with this bill except the label,” said Rep. Sander Levin, Michigan Democrat.