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Minnesota Public Radio - 'Buffet Rule' Plays into Bigger Debate Over Taxes and Spending

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Location: Washington, DC

The Obama Administration's Buffet Rule, scheduled for a vote Monday in the U.S. Senate and expected to be filibustered by Republicans, seems destined to become a political talking point in the fall election.

President Barack Obama has been promoting the tax proposal named after billionaire Warren Buffett that would require anyone making more than $1 million a year to pay at least 30 percent of their income in taxes. Right now, many wealthy individuals -- including likely Republican nominee Mitt Romney -- pay a lower percentage of their income in taxes than do people in the middle class.

"This is fairness to working people," Sen. Al Franken, D-Minn., said. "In a country where it's getting harder and harder and harder for working people, this seems to be a move in the right direction."

In part, Franken and his fellow Democrats see their oft-repeated message of fairness as a cudgel to break the Republican Party's refusal to consider increasing taxes as part of the solution for reducing the budget deficit.

Meanwhile, the words Republicans prefer to use are "growth" and "opportunity" -- particularly for small business.

Which is why House Republicans, including 2nd District Rep. John Kline, have unveiled a one-year tax cut for companies that employ fewer than 500 workers.

"What's really fair is to have a policy in place that lets Americans get back to work," Kline said.

Kline said the Buffett Rule puts the principle of fairness ahead of jobs and won't raise nearly enough money to close the budget deficit.

From across the aisle, Franken agrees that this measure won't take care of the deficit by itself.

"It's not going to solve everything. No one says it will," Franken said.

But he says policies like the Buffett Rule would bring in $5 billion a year or so of extra tax revenue for cash-strapped schools and transportation programs, which could also strengthen the economy.

U.S. Rep. Erik Paulsen, R-Minn., said Republicans don't want to raise taxes but would like to see what they call pro-growth tax policies that will raise government revenues.

"We're not going to be able to cut our way, cut spending enough to solve the entire deficit and the entire national debt," Paulsen said. "We have to grow the economy and so we get small businesses in particular again to lead the way out of this recession."

Carlton College political science professor Steven Schier said the state of the economy is going to determine whether the message of fairness or growth sways voters.

"I think the income inequality issue works better in a growing economy than it does right now," Schier said.

That's because if jobs are scarce, people might lower their expectations and just be happy with what they have. But Schier said if the economy keeps growing, many voters will want their fair share.

He said the Buffett Rule will likely energize two groups of voters in Minnesota: urban Democrats in the Twin Cities and socially conservative rural voters who aren't sympathetic to the Wall Street types whose taxes would go up under the proposal.

"Traditionally, equity issues of the sort that Obama is raising have had more resonance in Minnesota than other Midwestern states," he said.

In fact, Census figures show that Minnesota has less income inequality than at least 35 states, including many of its neighbors.

Overall, DFL Sen. Amy Klobuchar is optimistic that the issue will eventually break for Democrats, but she concedes the effort will take time.

"You just keeping trying at it and pretty soon the public gets mad enough and they want to do something about the debt and have an even playing field," she said. "Finally there comes some kind of a vote and an agreement where you look at this as part of the mix."

Klobuchar and other members of the delegation say that some sort of agreement on taxes is possible after this November's elections when the lame-duck Congress will have to tackle a variety of tax measures that expire on December 31.

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