Washington, DC – Billionaire investor Warren Buffett has said he pays a lower percentage of his income in taxes than his secretary. As millions of Americans file their taxes today, Senator Sheldon Whitehouse (D-RI), Chair of the Senate Finance Subcommittee on Taxation and IRS Oversight, introduced his legislation to fix this problem. Whitehouse’s Paying a Fair Share Act would ensure multi-millionaire and billionaire taxpayers like Warren Buffett pay at least a 30 percent effective tax rate.
“Our tax code is riddled with loopholes to help the wealthy avoid paying a fair share in taxes,” said Senator Whitehouse. “We shouldn’t have a system where the ultra-rich get away with paying less than the people working for them. We need a straightforward baseline to ensure everyone pays a reasonable share of taxes.”
Joining Whitehouse on the bill as original cosponsors are Senators Sherrod Brown (D-OH), Dick Durbin (D-IL), Elizabeth Warren (D-MA), Ed Markey (D-MA), Amy Klobuchar (D-MN), Dianne Feinstein (D-CA), Tammy Baldwin (D-WI), Jack Reed (D-RI), Chris Van Hollen (D-MD), Patrick Leahy (D-VT), Cory Booker (D-NJ), Richard Blumenthal (D-CT), Mazie Hirono (D-HI), Kirsten Gillibrand (D-NY), Bernie Sanders (I-VT), and Jeff Merkley (D-OR).
“There’s no reason why the richest people in the country should be paying less in taxes than the workers that they employ. Period,” said Senator Brown. “Corporate greed is fundamental to the Wall Street business model and until we change that, the richest people in the country are going to continue exploiting loopholes so they don’t have to pay their fair share.”
“While working families are struggling to make ends meet, the exceedingly-wealthy are exploiting loopholes in our federal tax system to avoid paying their fair share,” said Senator Durbin. “The ‘Buffett Rule’ will help restore fairness and integrity to the tax code.”
“Too often, loopholes in our tax code allow millionaires and billionaires to pay a lower tax rate than workers like nurses, food service workers, firefighters, and police officers,” said Senator Klobuchar. “By setting a simple, standard tax rate on income over $1 million, the Buffett Rule ensures that every American pays their fair share.”
“We need to make sure millionaires and billionaires at the top are paying their fair share of taxes so we can invest in building economic security for working class families and small businesses.” said Senator Baldwin. “I’m proud to once again join Senator Whitehouse to introduce the Paying a Fair Share Act to make the ‘Buffett Rule’ a reality. This legislation will ensure that our path forward is guided by fairness and that our tax system starts to reward hard work, and not just wealth.”
In 2018 the highest-earning 0.001% of Americans – making an average of $167 million each – paid an average effective federal tax rate of just 23 percent, far short of the top marginal rate of 37 percent. That is similar to the effective rate paid by the average iron and steel worker or high school special education teacher in Rhode Island, according to data from the IRS and the Rhode Island Department of Labor and Training.
The Paying a Fair Share Act would apply only to taxpayers with income over $1 million, including capital gains and dividends, and would phase in over their second million dollars in income. The bill includes language to preserve the incentive for charitable giving.
Bill text is available here.
