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WHAT HAPPENED The debate over higher taxes for the wealthy returned to center stage this week, as Senate Republicans filibustered a millionaires’ tax championed by President Obama. The
“Buffett Rule”—named after billionaire investor Warren Buffett, who famously complained that he paid a lower tax rate than his secretary—would impose a minimum 30 percent tax rate on anyone
earning $1 million or more per year. Even though polls showed that the bill enjoyed support from 72 percent of the public, Senate Democrats were unable to get the 60-vote majority required
to break a filibuster, with senators voting 51 to 45 to proceed. Senate Republicans derided the Buffett Rule as an election-year gimmick. But Obama said the bill would be the first step to
bringing some “basic fairness” to the tax code, adding that it was “just plain wrong that millions of middle-class Americans pay a higher share of their income in taxes than some
millionaires and billionaires.” House Republicans countered with their own election-year tax proposal—the “Small Business Tax Cut Act,” which would cut taxes by 20 percent for businesses
with fewer than 500 employees. The bill, proposed by House Majority Leader Eric Cantor (R-Va.), was expected to pass the Republican-controlled House but to die in the Democratic-controlled
Senate. “Since the other side will not join us in an honest tax-reform discussion,” said Cantor, “we believe that right now it is urgent that we help our job creators.” SUBSCRIBE TO THE WEEK
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Week delivered directly to your inbox. WHAT THE EDITORIALS SAID The Buffett Rule is a “non-solution to a non-problem,” said _NATIONALREVIEW.COM__._ Wealthy Americans already pay the bulk of
federal income taxes. Only 10 percent of millionaires are taxed at a rate of 24 percent or less—most of them retirees and professional investors who get most of their incomes from capital
gains, rather than salaries. This supposed fix would only raise $5 billion a year anyway, said _THE WALL STREET JOURNAL_, or less than 0.5 percent of this year’s budget deficit. For all
Obama’s talk of “fairness,” this gimmicky addition to the tax code would serve only to advance his goal of “spreading the wealth”—while effectively doubling the capital-gains tax and
discouraging investment and job creation. The Buffett Rule makes sense as a simple matter of fairness, said _THE WASHINGTON POST_. But even ending the Bush tax cuts on those making more than
$250,000—another Obama goal—would not fund the country’s burgeoning entitlement costs while reducing the annual $1 trillion deficit. Sadly, Obama would prefer to “rail against millionaires
who fail to pay their fair share than to say that the pain will have to be more widely shared.” WHAT THE COLUMNISTS SAID A free daily email with the biggest news stories of the day – and the
best features from TheWeek.com The Buffett Rule isn’t tax policy, said CHARLES KRAUTHAMMER in _THE WASHINGTON POST_. It’s a naked attempt to “channel the sentiment underlying Occupy Wall
Street,” and pit the 99 percent against the 1 percent. The fact that Obama will keep talking about higher taxes on the rich has nothing to do with debt reduction, and “everything to do with
re-election.” True enough, said NANCY COOK in _NATIONALJOURNAL.COM_, and it just might work. The Republicans’ adamant opposition to raising taxes on millionaires will give Obama and the
Democrats “a clear, distinct talking point for the campaign trail”—that they alone are the defenders of the middle class, standing up for fairness and civic responsibility. The Buffett Rule
is indeed a political ploy, said JONATHAN CHAIT in _NYMAG.COM_, “but that doesn’t make it wrong or even cynical.” It’s a symbolic way of exposing “Republican extremism”—the party’s nutty
opposition to _any_ higher taxes on the rich. Republicans aren’t alone in their irrational “anti-tax orthodoxy,” said EZRA KLEIN in _BLOOMBERG.COM_. Obama and the Democrats won’t consider
raising taxes on anyone except the 2 percent of Americans earning $250,000 or more. But that will only raise $1.5 trillion over 10 years—not nearly enough to “pay for the social welfare
state they say they support.” With the country facing mounting costs and growing debt, the only responsible way forward is “comprehensive tax reform,” with broadly distributed increases.
Sadly, both parties would rather pander to their respective constituencies with “ridiculous tax pledges.”