Lieberman Statement on Buffett Rule

Statement

Senator Joseph Lieberman (I-CT) today issued the following statement regarding the Buffett Rule:

I know there are many who dismiss the President's proposal of the so-called Buffett Rule as an election year tactic which has no chance of being enacted. But, for me, it must be taken as a serious proposal because it touches important economic principles at a very difficult economic time for our country. Although I was unable to be present for this afternoon's vote, I would have voted against the motion to proceed to the Paying a Fair Share Act of 2012 (S. 2230) and I want to explain why.

I am not opposed to the Buffett Rule because I am opposed to raising income taxes on the wealthiest Americans. I am opposed to the Buffett Rule because it would double to 30 percent the capital gains tax on one group of investors and therefore reduce exactly the kind of capital investments we need to get our economy growing again and create jobs. To protect America from being drowned in public debt we will eventually have to raise revenues, hopefully through broad tax reform, and, of course, we will also have to cut expenditures, particularly the rate of increased spending on so-called entitlement programs. But that is different from the question of how to tax gains on capital investments. I have long believed in the value of having a lower tax on capital gains than on regular income because capital investments are one of the engines that has driven this great economy of ours, made us the land of opportunity, and created the American middle class. Someone once said that if you take the "capital" out of capitalism, all you have left is an "ism". There is a lot of truth in that play on words.

My support for a lower capital gains rate was probably born when one of the great political inspirations of my life, President John F. Kennedy, advocated lower capital gains taxes as part of his "a rising tide raises all boats" fiscal policy. During my first term in the Senate in 1989, I supported President George H.W. Bush's proposal to lower the capital gains tax. I was one of a small group of Democrats to do so. During the nineties, I worked alongside the late, great Jack Kemp in support of lower capital gains rates, especially for gains made on capital investments in low-income urban and rural areas which we called Enterprise Zones. Throughout the years, I cosponsored broad proposals to lower the capital gains tax with Senator Hatch and other members of the Senate from both political parties. To me, economic history proves that lower capital gains taxes grow our economy and higher capital gains taxes don't increase revenues. This particular tax increase is especially ill-timed, since it is clear that literally billions of dollars are now being held back from new investments in America by individuals and businesses because they are uncertain about the future of our economy and the future of government policies that will affect their businesses and their investments. The best thing we could do to regenerate economic growth is to adopt broad based tax and entitlement reform that would bring our government books into balance and give American businesses and investors a sense of certainty about the economic environment in which they will be living for years to come. The Buffett Rule, on the other hand, targets a particular kind of economic activity -- capital investments -- which are what America's economy and people urgently need now. And that is why I would have voted against the Buffett Rule.

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