'Buffett Rule' A Rallying Cry For Obama At Tax Time
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President Obama's campaign continues full speed. Today, Mr. Obama spoke at a $10,000-a-plate fundraising luncheon. And later he renewed a rallying cry for Democrats just ahead of the deadline for tax filing. It's the Buffett Rule, named for billionaire investor Warren Buffett. It aims to bring in more taxes from the richest Americans. NPR's Scott Horsley tells us more.
SCOTT HORSLEY, BYLINE: President Obama first proposed the Buffett Rule as a guiding principle last fall, and it's now been codified in a bill the Senate is expected to vote next week. It would require anyone making a million dollars a year or more to pay at least 30 percent in taxes - about twice what some millionaires pay now. Mr. Obama told an audience in Boca Raton, Florida this afternoon, it's a simple matter of fairness.
PRESIDENT BARACK OBAMA: The share of our national income going to the top 1 percent has climbed to levels we haven't seen since the 1920s. This - the folks who are benefiting from this are paying taxes at one of the lowest rates in 50 years. You might have heard of this, but Warren Buffett is paying a lower tax rate than his secretary.
HORSLEY: That's because Buffett makes most of his money from dividends and capital gains, which are taxed at a lower rate. And he's not alone. According to the White House, there are some 22,000 millionaires who pay less than 15 percent of their income in taxes. One of them is running for president.
MITT ROMNEY: What's the effective rate I've been paying? It's probably closer to the 15 percent rate than anything.
HORSLEY: That's presidential hopeful Mitt Romney, whose tax rate in 2010 was just under 14 percent. Like Buffett, Romney makes most of his money from investments. Senate Democrats hope to call attention to that disparity by holding a vote on the Buffett Rule just before next week's tax filing deadline. The measure has zero chance of becoming law. Even if it did, it would produce relatively little additional revenue - less than $5 billion a year. Still, White House spokesman Jay Carney says next week's vote will force lawmakers to take a stand on a minimum tax rate for millionaires.
JAY CARNEY: That's what votes do. They put senators on record. And we will certainly see how senators handle the opportunity to vote on the so-called Buffett Rule.
HORSLEY: Polls suggest a majority of Americans support the Buffett Rule, even if most tax experts don't.
BOB WILLIAMS: The Buffett Rule is a very crude way to solve a problem in the tax system.
HORSLEY: Bob Williams, of the nonpartisan Tax Policy Center, says the problem with the tax system is all the special deductions and carve-outs that allow people making similar incomes to pay very different tax rates. He understands the desire to fix that but says the answer is not another layer of complexity, like a special tax rate for millionaires.
WILLIAMS: At the end of day, when I finish doing my taxes, I have to scratch my head and figure out how the program came up with the numbers it came up with. And I'm a tax expert. How can it be that a normal person can understand this?
HORSLEY: All that head scratching can be costly, both in accounting headaches and in the consequences when companies are driven by tax laws take actions they otherwise wouldn't. Williams says the more inscrutable the tax code is, the less faith people are likely to have in it.
WILLIAMS: When you start having that distrust of the tax system, then you have political problems. People are less supportive of the tax system. One of the reasons why people want to see lower taxes is because they feel they are paying too much and somebody else is paying too little.
HORSLEY: Experts from across the political spectrum say the tax code could be improved by doing away with loopholes and lowering rates. That would require a degree of compromise, though, that's hard to imagine in the current political climate. Scott Horsley, NPR News. Transcript provided by NPR, Copyright NPR.