Congress just can’t stop dropping the name of Warren Buffett.
When the billionaire said he shouldn’t pay a lower tax rate than his secretary, President Barack Obama and congressional Democrats seized on that reasoning and proposed a minimum federal tax rate for the nation’s top earners. The catchy title they came up with was “the Buffett rule,” named after the chairman and chief executive officer of Berkshire Hathaway Inc.
Republicans in the U.S. House yesterday called up a different tax proposal with a not-so-coincidentally similar title: “The Buffett Rule Act of 2012.”
The bill, which the House passed by voice vote, would make it easier to give money to the U.S. government by adding a place on tax returns for voluntary contributions toward paying down the national debt.
“There’s nothing wrong with this bill except the label,” Representative Sander Levin of Michigan, the top Democrat on the House Ways and Means Committee, said during floor debate. “This bill has nothing -- zero -- to do with the Buffett rule.”
Democrats couldn’t control the hijacking of their catch phrase, so they settled for reminding constituents that not all “Buffett rules” are equal.
Members of the public already can make contributions to reduce the national debt online by credit card, checking or savings accounts. They also can mail a check to the Bureau of the Public Debt. The Republican bill would add federal income tax forms as another means for accepting donations.
The measure says federal income tax forms would include a box alongside the following text: “By checking here, I signify that in addition to my tax liability (if any), I would like to donate the included payment to be used exclusively for the purpose of paying down the national debt.”
The bill would see that each donation is and deposited in the general fund of the U.S. Treasury and transferred to a special account for gifts to reduce the debt. It would take effect starting with returns for the 2012 tax year and each donation would be tax-deductible.
“If Warren Buffett wants to give, then H.R. 6410 allows him to give to his heart’s content,” Ways and Means Committee Chairman Dave Camp said yesterday during floor debate, referring to the bill number. The Michigan Republican said the bill “makes it easy for those who want to donate money to the Treasury for debt reduction to voluntarily do so, without raising taxes on entrepreneurs and job creators.”
For Representative Steve Scalise, the Louisiana Republican who authored the legislation, the bill serves two purposes. It would make voluntary debt-reduction contributions as easy as the $1 donation to presidential campaign funds, and it lets the House respond to Obama, who brought Buffett’s secretary, Debbie Bosanek, to his 2012 State of the Union address.
The president “has used Warren Buffett as the poster-child for his class warfare scheme because Buffett complains that he doesn’t pay enough in taxes,” Scalise said in an e-mail before the House vote.
Buffett made his remarks about what he considers unfair tax rates in August 2011 and Obama proposed the concept of the “Buffett rule” the following month. Scalise introduced a previous version of his bill, with Buffett’s name as part of the title, last October.
In the Senate, Rhode Island Democrat Sheldon Whitehouse is the lead sponsor of legislation that would set a minimum 30 percent federal tax rate for households with adjusted gross incomes of at least $2 million a year.
A procedural vote on April 16 to proceed to consideration of the bill got 51 supporters in the Democratic-controlled chamber, short of the 60 needed.
Implementation of the Scalise bill would increase revenue by $135 million from 2013 through 2022, according to an estimate by the nonpartisan congressional Joint Committee on Taxation. By contrast, the Whitehouse measure would boost revenue by $47 billion during the next decade, according to the committee.
The bills are H.R. 3099, H.R. 6410 and S. 2230.
© Copyright 2016 Bloomberg News. All rights reserved.