The Buffett/Reagan Rule: Patriotic Millionaires for Fiscal Strength
I’m not the first President to call for this idea that everybody has got to do their fair share. Some years ago, one of my predecessors traveled across the country pushing for the same concept. He gave a speech where he talked about a letter he had received from a wealthy executive who paid lower tax rates than his secretary, and wanted to come to Washington and tell Congress why that was wrong. So this President gave another speech where he said it was “crazy” -- that's a quote -- that certain tax loopholes make it possible for multimillionaires to pay nothing, while a bus driver was paying 10 percent of his salary. That wild-eyed, socialist, tax-hiking class warrior was Ronald Reagan. He thought that, in America, the wealthiest should pay their fair share, and he said so… And if it will help convince folks in Congress to make the right choice, we could call it the Reagan Rule instead of the Buffett Rule.
- President Obama
President Obama is not the only President who called for a fair tax code. And, Warren Buffett is not the only millionaire or billionaire who pays a lower tax rate than his secretary. They are both in good company. Thousands of millionaires across the country benefit from an unfair tax code filled with loopholes and tax giveaways for the wealthy. And over a hundred of those millionaires have come together to form the Patriotic Millionaires for Fiscal Strength. These Patriotic Millionaires have united to urge Congress to let the Bush era tax cuts expire for people making more than $1 million a year. And just last month, the Patriotic Millionaires for Fiscal Strength joined President Obama in calling on Congress to pass the Buffett Rule. Or shall we call it the Reagan Rule.
As one Patriotic Millionaire explained, “this small monetary sacrifice is both an ethical and patriotic decision, made in the hopes of allowing the United States of America to continue to be a leader economically, politically, and morally.”
In 1963, millionaires had a top marginal tax rate of 91%. In 1976, millionaires had a top marginal tax rate of 70%. Today, millionaires have a top marginal tax rate of 35%. And, almost half of today’s members of Congress are millionaires themselves. The President and the Patriotic Millionaires believe we have an important choice to make. We can either make investments in things like education, transportation, and new sources of energy – investments that have always been essential to America’s businesses and to creating good middle class jobs. Or we can cut taxes even more for wealthy Americans who don’t need tax cuts and didn’t ask for them. As President Obama stated:
The middle class has seen enough of its security erode over the past few decades that we shouldn't let that happen. And we're not going to stop investing in the things that create real and lasting growth in this country just so folks like me can get an additional tax cut. We're not going to stop building first-class schools and making sure that they've got science labs in them. We're not going to fail to make investments in basic science and research that could cure diseases that harm people, or create the new technology that ends up creating entire jobs and industries that we haven't seen before. In America, prosperity has never just trickled down from a wealthy few. Prosperity has always been built from the bottom up and from the heart of the middle class outward.
Patriotic Millionaire Whitney Tilson agrees in an op-ed in the Washington Post:
It’s not class warfare to say that people like me — who aren’t suffering at all in these tough economic times, who are in many cases doing the best we’ve ever done and who can easily afford to pay more in taxes with no impact on our lifestyle — should be the first to step up and make a small sacrifice.
I don’t kid myself that I’m making any real sacrifices. The men and women who have been fighting for the past decade in Iraq and Afghanistan — thousands of them coming home in coffins or missing limbs — are making true sacrifices. And when they enter the domestic workforce, they shouldn’t have to pay taxes at a significantly higher rate than the vast majority of millionaires pay.
Some critics of the Buffett rule point out that it would raise only an estimated $47 billion over 10 years, which is a sliver of the 2011 deficit of $1.3 trillion, let alone the national debt of $15.6 trillion. They’re right that this, by itself, won’t be enough. But we have to start raising money somewhere, and if it isn’t from people like me, it will have to come from people less fortunate than I am. Think of it this way: Every billion dollars not raised from millionaires is equal to a million average U.S. families each paying an extra $1,000 in taxes. That would be real hardship for a lot of families that, unlike mine, are struggling to make ends meet.
Although the Buffett Rule did not pass Congress, the Patriotic Millionaires have continued their fight for fairness for all Americans.
Brad Jenkins is an Associate Director in the Office of Public Engagement.