Senator Sheldon Whitehouse on His "Paying a Fair Share" Act
On February 1 of this year, Senator Sheldon Whitehouse
(D-RI) submitted a new bill to his colleagues, the "Paying a Fair Share" Act,
which would end the era of big bosses paying a smaller percentage of their annual
incomes to the IRA than do their employees. The act is known informally as the
"Buffett Rule" tax bill.
Today the Senator participated in a conversation about this
act as well as in general building an economy that is fair to all, at the
Center for American Progress. Others speaking with him included Jason Furman,
Deputy Director of the National Economic Council; Michael Ettlinger, Vice
President for Economic Policy, Center for American Progress Action Fund; and
moderator Tom Perriello, President and CEO, Center for American Progress Action
fund.
Senator Whitehouse began by denying that he is an economist,
but that many see the issue of income equality as political as well as
economic. The Buffett Rule, recently publicized and already a household word,
makes sense in the context of the present tax code, weighted so heavily toward
big bosses rather than lower-level workers.
We are supposed to be providing examples to the rest of the
world rather than caving in to special interests, he said.
Tom Perriello said that when he was in England, the people
there saw the U.S. economy as concentrated on wealth, with soft- and hard-power
implications overseas.
Jason Furman noted that where fairness and growth are
present, the situation is win-win. Having worked on all four of the Obama
budgets, with the most recent one the most difficult, he pinpointed the
underlying deficit as a major consideration.
The Buffett Rule is a no-brainer rather than a tough choice,
he continued. What is needed from wealthy citizens earning more than $1 million
a year are fewer itemizations on tax returns and an increase in the capital
gains tax. The four hundred citizens who paid the highest taxes in the country
paid at a rate of 15 percent, Furman specified later to an audience questioner.
Fifty years ago, wealthy people fell into the 50 percent tax
bracket, which no longer exists, while the middle class paid a rate of 15 to 17
percent. At that same time, the economy here flourished, with high productivity
its hallmark.
Since then, specifically the Reagan-era onset of
trickle-down economics, income inequality has grown for decades.
Michael Ettlinger reiterated the point about the fall of the
middle class as income inequality increased. The regressive income tax is a
tried and failed method; the Bush tax cuts were built on unsustainable debt,
which raised the deficit astronomically.
The bottom line of Whitehouse's new bill is simple: Add
another line to tax forms requiring all those with an income in excess of $1
million to pay 30 percent of it in taxes, period. They can also calculate their taxes according
to traditional methods, including loopholes and deductions, compare the totals,
and then pay the larger one of the two.
Said Whitehouse, economic trends between 1960 and the
present and the 1990s compared with the 2000s prove that his bill will be
effective.
Michael Ettlinger made the point that it is a bad idea to
raise taxes during a recession. Nor is this the time for spending cuts, which
adversely affect economic growth and deficit reduction.
We need investments that will grow the economy.
Tom Perriello said that the Whitehouse bill has garnered a
great deal of support from Independents. Whitehouse added that while
Republicans on Capitol Hill grumble and complain, those in his home state of
Rhode Island support his bill; the public sees them as "slam-dunk common
sense."
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