President Barack Obama is pushing it; his likely Republican challenger rejects it; and the US Senate can neither advance nor kill it. At issue is the so-called Buffett Rule, which would ensure that Americans whose incomes exceed $1-million dollars pay a minimum tax rate of 30%.
“This is a gimmick, it’s a political gimmick,” US Senator Pat Toomey (R-PA) said on the Senate floor this week. Toomey believes the ongoing debate is an effort to engage in class warfare and distract from the Obama administration’s economic mismanagement.
But Keystone Research Center labor economist Mark Price says you can’t pay down the nation’s massive budget deficit without raising additional revenue. “Very wealthy households are able to take advantage of tax loopholes to pay less of their income in taxes than many middle class Pennsylvania families,” he says.
In their Buffett Rule analysis, Price and the Pennsylvania Budget and Policy Center examined seven of the richest zip codes in the nation. What they uncovered was an effective tax rate of 17.2%. By comparison, they found that 99% of the Commonwealth’s taxpayers live in zip codes where the average tax rate is higher.
Pennsylvania is home to roughly 10,000 millionaires, but Price believes the Buffett Rule would only impact between 1,000 and 4,000 of them.
The Buffett Rule’s namesake – billionaire investor Warren Buffet – has just revealed that he’s been diagnosed with an early stage of prostate cancer. In a letter to Berkshire Hathaway shareholders, Buffett indicated that it is not life threatening or debilitating.