This vote was on a procedural motion that would have cleared the way for a vote on whether the Senate would consider legislation setting a minimum tax rate for people who earn over $1 million annually.
The Senate’s Democratic leadership sought to bring up a bill that would implement the “Buffett Rule,” a term coined after billionaire Warren Buffett publicly noted that U.S. tax law allows him to pay a lower tax rate than his secretary. Under the terms of the bill, which was introduced by Sen. Sheldon Whitehouse (D-RI), individuals who make more than $1 million annually would have to contribute at least 30 percent of their income to the Treasury.
Sen. Whitehouse argued that his bill would help ensure that wealthy Americans cannot use tax loopholes and clever accounting to game the tax system. The Senate should take up the bill as a way to impose a measure of fairness on a system that politicians and lobbyists had rigged to favor the wealthy, he said.
“Our tax system is supposed to be progressive. The more one earns, the higher the rate one pays. That is not class warfare; that is tax policy,” Sen. Whitehouse said. “We undermine that principle when we allow the highest-income Americans to pay a lower tax rate than a truck driver pays. It is no wonder that so many of the Rhode Islanders with whom I have spoken have lost confidence that our tax system gives them a straight deal.”
Opponents of Sen. Whitehouse’s bill argued that it was “driven by campaign rhetoric.” They argued that because the bill would effectively raise taxes on income from investments, upper-income taxpayers would find it more difficult to direct their money into projects that create jobs.
“I think the Buffett Rule is bad economics, I think it is bad fiscal policy, and I think it is a distraction from the broader bipartisan effort underway to achieve fundamental tax reform that is necessary to unleash a true economic recovery,” Sen. Rob Portman (R-OH) said. “Instead of an election-year gimmick that won't help the economy, it is time to focus on fundamental tax reform to make American businesses and workers more competitive again.”
Even though the procedural motion to move forward with the Buffet Rule bill received 51 “yea” votes and only 45 voted “nay,” the motion failed because it was brought up under Senate rules that require 60 votes for passage. Voting “yea” were 50 Democrats and 1 Republican. Voting “nay” were 44 Republicans and 1 Democrat. As a result, the Senate defeated the effort to set up a debate on legislation setting a minimum tax rate for individuals who earn over $1 million annually.