WASHINGTON — U.S. Senate Republicans defeated President Obama’s high-income tax plan, the Buffett Rule, on Monday night, blocking it on a procedural vote. In all, 50 Democrats, including Minnesotans Amy Klobuchar and Al Franken, and one Republican backed the proposal; 44 Republicans and one Democrat voted no. Sixty votes were required for passage.
The Buffett Rule as policy is dead, at least for now, but as a political talking point and a part of the larger election year debate over taxing and spending, it lives on. Polls show strong support for the Buffett Rule among voters, and Democrats are hoping to cash in on that “tax-the-rich” sentiment come November.
Democratic lawmakers say the Buffett Rule is a matter of fairness, ensuring people who make more than $1 million a year pay at least 30 percent in income taxes. After the vote Monday night, they said it was also a component of paying down the federal deficit in a “balanced” way, combining spending cuts with increased revenue.
Sen. Franken, who co-sponsored the defeated Buffett Rule provision, said voters will invariably need to compare the Democrats’ approach with that put forward by House Republicans, who passed a budget that couples lowered tax rates across the board with deep cuts to federal spending. Franken said he preferred to raise revenue through taxes on high-income earners to prevent deeper cuts from coming elsewhere.
“Anybody who’s been on the ground looking at what the economy has been doing knows that we have to make investments in education and infrastructure and innovation,” Franken said. “If you don’t have some more revenue coming in you can’t do that without increasing the deficit.”
A matter of fairness
The White House’s basic refrain on the Buffett Rule goes back to that issue of fairness, that those who make more money should pay a similar tax rate to those who make less.
“This idea of fairness and making everyone play by the same set of rules is going to be something we’re going to keep talking about,” said Kristin Sosanie, the spokeswoman for the Obama campaign in Minnesota. “It’s what the president really believes and it’s what Minnesotans are really clambering for.”
Politically, they see the issue as winner, and they have the polling to back them up — 60 percent of respondents told Gallup that they support the Buffett Rule; 72 percent said the same to CNN.
So it’s no surprise that Democrats desperately want it to be a top issue this fall.
“It will be a huge issue,” said Ken Martin, the chairman of the Minnesota DFL Party, one that’s already “proven to be successful for Minnesota Democrats” like Gov. Mark Dayton, whose 2010 gubernatorial campaign was based around raising taxes on high-income earners to close state budget deficits.
Martin said Minnesotans are especially sensitive to the high-income earner taxation debate, given the way the state government shutdown unfolded last year.
Republicans see it as a ‘gimmick’
But Republicans say the November campaign is going to be more of a referendum on President Obama’s overall handling of the economy than about a debate on the tax rate for millionaires.
Republican strategist Ben Golnik said issues like gas prices, unemployment, the Affordable Care Act and the ballooning national debt will take priority over the Buffett Rule in voters’ minds. He called it a political “gimmick” from Democrats, who would have been better suited to move such a proposal during the first two years of Obama’s term, when they had a bigger presence on Capitol Hill.
House Republicans seemed to take on that approach Monday, highlighting their efforts to ease the tax burden on small businesses and reduce the cost of gas, even as their Senate colleagues took up the doomed Buffett Rule.
When it comes to the tax code, the slate of Republicans looking to challenge Sen. Klobuchar this fall have tacked a more conservative position.
Pete Hegseth said he’d push for a simpler tax code consisting of fewer and lower tax brackets. He said Democrats wrongly see the Buffett Rule as “a political asset, but it does nothing to solve the problems facing this country.”
“It’s not a revenue problem we have right now,” he said, “it’s a spending problem.”
Former state Rep. Dan Severson (who received a Tax Day thank you from Grover Norquist after he signed the Americans for Tax Reform pledge) struck on a similar tone: “It’s not about increasing taxes; it’s about decreasing spending.”
His simple message for would-be voters: “We pay enough already.”
A means for reducing the deficit
To be sure, the Buffett Rule, or some form of it, could resurface in the intervening months between the Nov. 6 election and the swearing in of a new Congress next January. Congress will have to confront the fate of the George W. Bush-era tax cuts that expire on Dec. 31.
Klobuchar said that between rolling back those tax cuts (for people making more than $250,000), closing of tax loopholes, ending subsidies to oil companies and revisiting the Buffett Rule, Congress could put together a solid deficit-reduction package. All told, that adds up to about $800 billion in new revenue over 10 years, she said, coupled with the $2.2 trillion in cuts Congress has already approved.
“The issue here is, you have to do this in a balanced way,” she said. “I think Minnesotans understand that you have to look at both spending cuts and revenue.”
Devin Henry can be reached at dhenry@minnpost.com. Follow him on Twitter: @dhenry