In remarks today, President Obama reiterated his support for the “Buffett Rule,” the idea that millionaires should not a pay a lower share of their income in taxes than middle-class families do. The Senate is taking up a bill that enforces that rule, though it’s not expected to go anywhere before the election, and Republicans have denounced it as a political ploy that would hurt small businesses and destroy jobs. What would the impact of that legislation be?
A 2011 report from the Congressional Research Service argues that Buffett Rule-style reforms are hardly the disaster-in-waiting that Republicans imagine them to be. The study estimates that about one-quarter of all millionaires pay a smaller percentage of their income in taxes than moderate-income taxpayers (with adjusted gross incomes under $100,000) do. That’s about 95,000 people. And to make their tax payments satisfy the Buffett Rule, lawmakers would probably have to raise taxes on long-term capital gains and let the Bush tax cuts finally expire. In some corners, these proposals have been met with doomsday warnings, but again, the CRS says there’s little to worry about: “Research suggests that these reforms are unlikely to affect many small businesses or to deter saving and investment.”