Tags: Obama | Buffett | Rule | Millionaires

Obama Enlists Millionaires in 'Buffett Rule' Campaign

Wednesday, 11 April 2012 08:12 AM

President Barack Obama is intensifying his campaign for higher taxes on top U.S. earners by casting the issue against Republican opposition as one of fairness and support for the middle class.

Obama enlisted what the administration described as a group of four millionaires and their assistants, all of whom support the so-called Buffett rule to set a minimum tax on people who earn at least $1 million annually.

The president met with Abigail Disney, president of the Daphne Foundation, Whitney Tilson, managing director of T2 Partners LLC, Frank Jernigan, a retired software engineer from Google Inc. and Lawrence Benenson, partner at Benenson Capital Co., according to an administration official. They were accompanied by their assistants at the event.

Editor's Note: Obama’s Economic ‘Fix’ is In . . .

Obama said the millionaires on the stage with him at the Eisenhower Executive Office Building are “rightly proud of their success.” They had agreed to take part in the event because “they haven’t been asked to do their fair share” and feel there is something “deeply wrong and irresponsible about that.”

The proposal, which faces Republican opposition in a test vote in the Senate on April 16, is named after billionaire investor Warren Buffett, who says he pays a lower tax rate than his secretary, largely because of the preferential treatment given to capital gains and dividends.

Agreement on Taxes

“They agree with Warren,” Obama said of the group. “This should be fixed.”

The administration didn’t release details about the tax rates paid by the four millionaires or their assistants.

Disney is the granddaughter of Roy O. Disney, co-founder of the Walt Disney Co. She and Tilson are Obama donors, according to the Center for Responsive Politics, a Washington-based group that tracks campaign finance. Disney and Tilson each have given Obama at least $5,000 over the past year, according to the center’s data.

Obama spent yesterday in Florida, a swing state central to his re-election strategy, talking about the Buffett rule and portraying Republicans as poised to undo a health-care law and other measures he said have helped students, senior citizens and the middle class.

‘Top 1 Percent’

The president spoke on the same day that former U.S. Senator Rick Santorum of Pennsylvania suspended his presidential campaign, removing the last major hurdle for Mitt Romney to claim the Republican Party’s nomination, and a week before the deadline for Americans to file their federal returns.

Speaking in Hollywood, Florida, at one of three fundraising events yesterday, Obama said the U.S. should be a place where “everybody has a chance to get ahead, not just those at the very top.”

“Right now, the share of our national income flowing to the top 1 percent has climbed to levels we haven’t seen since the 1920s,” Obama told students and faculty earlier in the day at Florida Atlantic University in Boca Raton. “And yet those same people are also paying taxes at one of the lowest rates in 50 years. That’s not fair.”

As the president turns more attention to his re-election, the Buffett rule is getting a push from White House policy officials and his campaign advisers. Obama’s speech yesterday was bracketed by fundraisers. Florida, with 29 of the 270 electoral votes needed to win the presidency, has gone to the winning candidate in 12 of the last 14 elections, including Obama in 2008.

Targeting Romney

Gene Sperling, director of Obama’s National Economic Council, said that at a time when the administration is proposing cuts in discretionary spending to bring down the deficit, the tax helps ensure there is “shared sacrifice.”

When some top earners pay tax rates that are less than middle-income families “that’s not good for our deficit; it’s also not fair, and it also breeds a degree of mistrust in our tax system,” Sperling said in a Bloomberg Television interview.

Tax fairness will be a central theme in the election, Obama campaign manager Jim Messina told reporters on April 9.

He said Romney, Obama’s likely opponent in November, has been a beneficiary of the current tax system and his proposals are based on protecting special tax rates for Wall Street investors and looking out for “people just like him.”

13.9% Rate

Romney, co-founder of Bain Capital LLC, earned $21.6 million in 2010 and paid 13.9 percent of that in income taxes, according to tax returns he released in January.

Gail Gitcho, Romney’s communications director, said in a statement Obama is “the first president in history to openly campaign for re-election on a platform of higher taxes. He has already raised taxes on millions of Americans, but he won’t stop there.”

The tax measure was inspired by Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. (BRK/A), who has said that the preferential tax rates on investment income should be increased. It would boost tax rates paid by households with incomes between $1 million and $2 million, phased up to a 30 percent minimum rate for those making more than $2 million a year. Taxpayers would be able to deduct charitable gifts.

The new rate would increase U.S. tax revenue by $47 billion over the next decade, assuming that income tax cuts enacted in 2001 and 2003 are allowed to expire at the end of the year as scheduled.

According to a White House report released yesterday, 22,000 households made more than $1 million in 2009 and paid less than 15 percent in income taxes.

IRS Study

The report cited an Internal Revenue Service study on the 400 U.S. taxpayers with the highest incomes in 2008, at $110 million or higher. Those people paid an average tax rate of 18.1 percent, excluding payroll taxes, down from 29.9 percent in 1995. Families in the middle 20 percent of the income distribution paid 16 percent in federal taxes in 2010, according to the report.

Under current law, ordinary income, including profits from small businesses, is taxed at rates up to 35 percent. Capital gains and dividends are taxed at no more than 15 percent.

The proposal isn’t designed with the average high-earning household in mind, Jason Furman, deputy director of Obama’s National Economic Council, said. Instead, he said, the goal is to raise taxes for the relatively few taxpayers who can use multiple tax breaks to lower their rates.

Editor's Note: Obama’s Economic ‘Fix’ is In . . .

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Wednesday, 11 April 2012 08:12 AM
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