We Need a Tax Code That Better Fits the Values of the Country
The "Buffett rule" would make our tax system fairer and better able to raise the revenue the country needs
April 16, 2012
The "Buffett rule" would make our tax system fairer.
Warren Buffett rightly said it's wrong that he and many other very wealthy people pay taxes at a lower rate than many middle-class Americans. Americans have long agreed that higher-income people should pay a larger share of their incomes in tax. Today's tax code, however, too often violates this principle: 21 percent of millionaires—about 50,000 people—pay a smaller share of their incomes in federal taxes than 3 million people making between $50,000 and $100,000, according to the National Economic Council.
Congress should enact the "Buffett rule" as a first step toward making our tax system both fairer and better able to raise the revenue the country needs.
Now is the perfect time. A startling share of the gains of economic growth in recent years have flowed to the top sliver of the population, while middle-income paychecks have stagnated. Also, tax rates on the top 1 percent of taxpayers have dropped by about a third since 1980.
Looking ahead, we need to rein in long-term deficits, which will require budget cuts that could affect a range of areas—from healthcare to national defense, border security, and transportation. But trying to address long-term deficits entirely through spending cuts would weaken this nation and make it harder to nurture the next generation of Warren Buffetts.
Simply put, we need more revenue and should begin by raising more from the people best able to afford it.
That means, as a first step, moving forward on the Buffett rule, letting President Bush's tax cuts exclusively for high-income people expire on schedule at the end of the year, and scaling back costly tax loopholes that mostly benefit the wealthy. That would be important progress toward a tax code that better fits the values of the country.