(Bloomberg News) The U.S. Senate blocked the proposed Buffett rule that would set a minimum 30 percent federal tax rate for the highest earners, stopping the legislation for now while an election-year debate on tax policy and income inequality continues.
The 51-45 vote yesterday in Washington fell short of the 60 needed to advance the measure, and Republicans derided the Buffett rule as a political stunt. President Barack Obama has been campaigning for the legislation across the country, maintaining that it's unfair that some high-income taxpayers use deductions and preferential tax treatment of investment income to pay lower rates than many middle-income wage earners do.
"Let's be clear," said Senator Pat Toomey, a Pennsylvania Republican. The proposal "is not a serious attempt to deal with tax reform or the budget."
The Republican roadblock of the measure may intensify partisan wrangling as Democrats seek to take advantage of public support for the idea. A Gallup poll last week showed about six in 10 voters favor the idea.
Senator Charles Schumer of New York said his fellow Democrats will return to the issue repeatedly and propose the minimum tax to pay for such items as a research and development tax credit or spending for college aid.
'Common Sense' Idea
"Republicans want to give even further tax breaks to millionaires and billionaires, while we think the very wealthy should share in more sacrifice so the burden doesn't fall on the middle class," Schumer said.
In a statement released after the vote, Obama criticized Republicans for blocking what he called a "common sense" idea.
"At a time when we have significant deficits to close and serious investments to make to strengthen our economy, we simply cannot afford to keep spending money on tax cuts that the wealthiest Americans don't need and didn't ask for," he said.
Speaking to Tea Party supporters in Philadelphia last night, Republican presidential candidate Mitt Romney said the Buffett rule would do little to help the struggling economy or to reduce the federal budget deficit.
"Someone calculated that the taxes he would raise in his Buffett rule would pay for 11 hours of government," Romney said of Obama at an anti-tax rally. "This is not exactly a grand idea."