Earlier this month, U.S. Senator Sheldon Whitehouse (D-RI) introduced legislation to implement the so-called "Buffett Rule," which would ensure that multi-million-dollar earners pay at least a 30 percent effective tax rate. The rule is named for legendary investor Warren Buffett, who has famously pointed out that he pays a lower tax rate than his secretary. Now, Mr. Buffett himself is endorsing Whitehouse's proposal, the Paying a Fair Share Act (S. 2059).
"I'm delighted to be identified as a supporter of S. 2059," Buffett wrote in a letter to Whitehouse. "I have no problem endorsing any large step in the direction of greater fairness in the tax code." He went on to say, "Thanks for what you are doing for our country."
"I'm honored to have Warren Buffett's support in the fight to create a fairer tax system for middle class families," said Whitehouse. "Mr. Buffett has long been a champion on this issue, and I look forward to working with him to make sure that all Americans are paying their fair share toward our nation's success."
Whitehouse's legislation, which has also been introduced in the House by Rep. Tammy Baldwin (D-WI), would apply only to taxpayers with income over $1 million -- including capital gains and dividends. Taxpayers earning over $2 million would be subject to a 30% minimum federal tax rate. The tax would be phased in for incomes between $1 million and $2 million, with those taxpayers paying a portion of the extra tax required to get them to a 30% effective tax rate. The bill also includes language to preserve the incentive for charitable giving.
"I'm proud to be working with Senator Whitehouse on legislation that will help level the playing field between middle class families and the wealthiest Americans," said Congresswoman Baldwin. "For too long, millionaires and billionaires have avoided paying their fair share in taxes. Warren Buffett's endorsement of the Paying a Fair Share Act underscores its value to our economy and to working families who haven't gotten a fair deal," Baldwin said.
President Obama has also advocated for this issue, saying in his State of the Union address that "Tax reform should follow the Buffett Rule." And U.S. Treasury Secretary Timothy Geithner recently said during a Senate Finance Committee hearing that, "we're broadly comfortable with the approach Senator Whitehouse laid out in his proposal."