"Do we want to keep giving tax breaks to the wealthiest Americans like me, or Warren Buffett, or Bill Gates – people who don’t need them and never asked for them? Or do we want to keep investing in things that will grow our economy and keep us secure? Because we can’t afford to do both." Barack Obama
America prospers when everyone does their fair share, plays by the same rules, and has the same shot at success. That’s why President Obama supports the Buffett Rule, named after famed billionaire Warren Buffett. The legislation would ensure that taxpayers that make more than $1 million a year pay at least the same tax rate as middle-class families. The Buffett Rule would help make the tax code fairer and ensure everyone pays their fair share in order to reduce our deficit and invest in things like education, infrastructure, and innovation that help our economy grow. It is one important component of President Obama’s plan to create an economy that’s built to last.
The Tax Code Is Stacked against the Middle Class. The most fortunate American households are paying nearly the lowest Federal income tax rate in 50 years. These taxpayers disproportionately benefit from loopholes, deductions, exemptions, and preferential rates. As a result, some households with incomes over $1 million a year pay lower tax rates than many middle-class families do.
The Buffett Rule Would Restore Tax Fairness. The Buffett Rule is a simple principle that would make the tax code fairer: No household making more than $1 million should pay a smaller share of their income in taxes than middle-class families pay. The Buffett Rule would limit the degree to which the best-off can take advantage of loopholes and tax rates that allow them to pay less of their income in taxes than middle-class families.
A Balanced Plan to Pay Down the Deficit by $4 Trillion. The President’s balanced plan for at least $4 trillion in deficit reduction over the next 10 years through a combination of spending cuts and increased revenues asks everyone to pay their fair share. The President has already enacted $1 trillion in spending cuts, which will bring discretionary spending to its lowest levels as a share of the economy since the Eisenhower Administration. He proposed additional steps to restrain spending and ask high-income families to contribute more to the deficit. To make sure everyone plays by the same rules and pays their fair share, he has called for Congress to pass the Buffett Rule, while limiting the deductions available to the highest-income earners and repealing the Bush tax cuts for families over $250,000. The President’s plan levels the playing field for businesses and eliminates unfair loopholes that let corporations dodge their taxes or that encourage them to ship jobs overseas.
Investments in the Middle Class and an Economy Built to Last. President Obama’s budget reduces the deficit while allowing investments in creating jobs now and strengthening the future of the middle class.
The President’s budget:
Opposes the Buffett Rule: Governor Romney would not ask the wealthy to pay their fair share, even though many millionaires and billionaires pay lower tax rates than middle-class families do.iii He believes that tax breaks for the wealthiest will trickle down to the middle class, but we tried that failed experiment over the last decade and it didn’t work. Romney’s tax plan is simply a return to the failed and reckless policies of the past, when irresponsible behavior went unchecked and the wealthy got breaks they didn’t ask for and didn’t need.
$5 Trillion in New Tax Cuts Favoring Wealthy People like Himself: Governor Romney has proposed $5 trillion in additional tax cuts over the next decade, over and above the cost of extending the Bush tax cuts. Taxpayers earning more than $1 million a year would get a $250,000 tax cut, while 18 million working families would see their taxes increase by an average of $900.iv
Romney’s Plan Drives Up the Deficit or Leads to Deep Cuts. To pay for these massive tax cuts, Romney will either drive up the deficit, make deep cuts in middle-class programs, or both. The consequences could include: