The Buffett Rule Act of 2012 is legislation similar to that of President Barack Obama's Buffett Rule, which is intended to raise taxes on the wealthiest Americans. The Buffett Rule Act was introduced in the U.S. House of Representatives in September 2012 by Republican U.S. Rep. Steve Scalise, who represents the 1st Congressional District of Louisiana.
About the Buffett Rule Act
The most important difference between the Buffett Rule Act and the original Buffett Rule is that the Republican legislation would voluntarily seek additional tax payments from wealthy American. The Obama proposal would raise the tax rate on Americans who earn more than $1 million a year but pay a smaller portion of their earnings to the government than do middle-class workers.
How the Buffett Rule Act Would Work
The Buffett Rule Act introduced by Scalise would place a check box on Internal Revenue Service tax forms allowing filers to donate "above and beyond their tax liability to pay down the national debt," according to the congressman's office.
The IRS forms would read: "By checking here, I signify that in addition to my tax liability (if any), I would like to donate the included payment to be used exclusively for the purpose of paying down the national debt."
Legislative Action on Buffett Rule Act
The House passed the Buffett Rule Act on Sept. 19, 2012. The Senate has not taken action on the bill.
Explanation of the Buffett Rule Act
The author of the bill said his legislation would allow millionnaires including Warren Buffett who feel they are not paying enough in taxes to increase their annual contribution to the federal Treasury without imposing the same increase on wealthy Americans who feel differently.
"The President keeps insisting that he wants to raise taxes on hard-working families and small businesses, and has used Warren Buffett as the poster-child for his class warfare scheme because Buffett complains that he doesn’t pay enough in taxes," Scalise said in a written statement.
"If Warren Buffett and others like him truly feel they're not paying enough in taxes, they can use the Buffett Rule Act to put their money where their mouth is and voluntarily send in more to pay down the national debt, rather than changing the entire tax code to inflict more job-killing tax hikes on hard-working Americans."
Impact of the Buffett Rule Act
An analysis of the Buffett Rule Act by the Joint Committee of Taxation estimated it could reduce the national debt by only $135 million over 10 years, a small portion of what the nation owes. At the time the bill passed the House, the national debt exceeded $16 trillion.
What the Original Buffett Rule Would Do
The proposal put forth by Obama would impose at least a 30 percent tax rate on Americans who earn more than $1 million a year. The original Buffett Rule is opposed by most Republicans, including the party's 2012 presidential nominee, Mitt Romney.
The Buffett Rule would raise taxes on an estimated 60,000 millionaires and generate about $13 billion in additional revenue over a decade.