Obama’s “Buffet Rule”, named after billionaire investor Warren E. Buffett, first surfaced in 2011 to establish that taxpayers earning more than $1 million should not pay a lower effective tax rate than lower income taxpayers. This was based on the widely publicized statement from the billionaire himself that he should not pay less of his income in taxes than his secretary (though I believe the politically correct term is now “Administrative Assistant”).
Obama’s latest budget request updated the rule to have households earning at least $1 million pay a minimum effective tax of 30 percent. Since it was presented as principle rather than a formal tax proposal, it was Senator Sheldon Whitehouse who then wrote the proposal as separate legislation. The new alternative minimum income tax of 30 percent would impact around 210,000 people making at least $2 million annually, and would then phase in the higher rate for those earning at least $1 million. The Senate will vote around 5:30 this evening on a motion to proceed to this legislation.
The revenue from implementing the rule would bring in about $314 billion more than letting the Bush tax cuts for millionaires expire. When people who are most underserved are being turned away for home energy assistance, job training, child care, housing, and education, and devastating cuts are being proposed for SNAP (formerly food stamps, and eventually we can all just accept that it has a new name) Medicaid and Medicare, it seems only fair that millionaires and billionaires chip in their fair share.