WASHINGTON — Sen. Sheldon Whitehouse (D-R.I.) introduced a bill in the Senate Wednesday that would require Americans earning over a million dollars a year to pay at least a 30 percent effective tax rate.
The legislation, called the Pay A Fair Share Act, would implement the “Buffett Rule” President Barack Obama outlined in his State of the Union address last week.
Obama has repeatedly called for more fairness in the current tax system, invoking billionaire investor Warren Buffett’s assertion that his secretary pays a higher effective rate on her income than he does on dividends and capital gains, which are taxed at 15 percent.
“It will bring fairness as well as common sense to our tax system,” Whitehouse said on the Senate floor Wednesday while introducing the bill. “With all the advantages that do come with an enormous income, paying a lower tax rate than average families should not be one.”
In advocating the passage of the bill, Whitehouse pointed out that the 400 highest earning Americans, who made on average $270 million dollars in 2008, paid the same effective federal tax rate, 18.2 percent, as a Rhode Island truck driver making about $40,000 a year.
The senator said earlier this week that the legislation would not affect the current tax system. Rather, those making over a million dollars a year would calculate their effective tax rate, and if it is less than 30 percent, they would be required to make up the difference.
Whitehouse added that the legislation would preserve incentives for charitable giving.
It is unclear if his bill would receive the support of Democratic party leaders.
The legislation is unlikely to be passed by Congress, since it is expected to be forcefully opposed by Senate Republicans and will be a non-starter in the Republican-led House of Representatives.