U.S. Senate to Vote on Minimum Income Tax Rate for Millionaires

The Chicago Tribune reports that the so-called “Buffett Rule” is coming before the U.S. Senate today for a vote. While there is strong public support for the bill, which would impose a minimum 30% tax on those individuals whose adjusted gross income exceeds $1 million, Republicans are uniformly against the law, and the proposal is not expected to become law. Even if the measure does somehow advance in the Senate, which is just barely controlled by the Democrats, it is unlikely that the bill would even be discussed in the House of Representatives, which is solidly controlled by the Republicans.

The Buffett Rule is named after Warren Buffett, a billionaire who supports the bill, and is designed to impose a minimum level of tax on the highest-income individuals in America. The 30% tax would be applied only after some deductions for charitable giving and some other tax credits. The rule would not apply to Americans who own assets worth $1 million or more, but only those with annual incomes of $1 million or more, thus targeting a much smaller section of the population, which is estimated at 433,000 households, or 0.3% of all American taxpayers.

U.S. Senate to Vote on Minimum Income Tax Rate for MillionairesThe idea of a minimum tax comes from research showing that the effective tax rates for taxpayers of different incomes vary dramatically. For instance, about 65% of taxpayers earning more than $1 million annually currently pay a lower tax rate than those who make $100,000 or less annually.

The income from the Buffett Rule would be at least $47 billion through 2022 if the rule was implemented as written. However, given the $1.2 trillion federal budget deficit, critics say that the law would not do much to reduce the overwhelming deficit.

As tax laws rapidly change, you will need skilled legal advice from a Naperville, Illinois tax attorney with the knowledge to steer you in the right direction. Contact the Naperville tax lawyers at The Gierach Law Firm today for assistance with all of your tax law needs.