* Fierce battle over so-called Buffett Rule
* Republicans say tax cut would aid small businesses
* Democrats say Republican plan would worsen deficit
By Kim Dixon
WASHINGTON, April 16 (Reuters) – President Barack Obama and
congressional Republicans square off this week over tax hikes
for millionaires and tax cuts for businesses, with little
expected to be accomplished beyond the winning of political
points.
Although chances are slim to none that any measure will
become law ahead of the Nov. 6 general election, the skirmishes
will give voters a preview of debates they will hear over the
next seven months.
Obama and his fellow Democrats are arguing that raising
taxes on the rich will help reduce deficits and bring more
fairness to the tax code. Congressional Republicans are pushing
a much different narrative of tax cuts – even if they add to
deficits – as a way of creating jobs.
As Americans scurry to file tax returns by Tuesday, the
Senate on Monday evening will debate legislation known as the
Buffett Rule, which would require households earning more than
$1 million to pay at least a 30-percent tax rate.
Central to Obama’s “tax fairness” re-election campaign
theme, the rule is named after billionaire Warren Buffett, who
supports it and famously complains that he pays a lower
effective tax rate than his secretary.
Solidly opposed by Republicans who argue raising taxes will
hurt the fragile economy, the Buffett Rule bill being offered by
Democrats is not expected to clear a procedural vote in the
Senate on Monday, when 60 out of 100 votes would be needed.
Democrats hold only a slim majority in the chamber.
“I do think it is an important message for Washington to
send to middle-class Americans,” said Senator Sheldon
Whitehouse, a Democrat sponsoring the legislation. “Even if we
come up short, we’ll keep pushing this issue all year long.”
CLASS WARFARE?
Republicans say the measure will do nothing to solve the
larger problem of deficits and unemployment.
“We have a president that seems more interested in pitting
people against each other than he is in doing anything,” said
Senate Republican Leader Mitch McConnell.
He was hitting on a Republican theme that raising taxes on
the rich was tantamount to class warfare.
On Thursday Republicans – in firm control the U.S. House of
Representatives – are expected to debate and likely approve a
bill to give a one-year, 20-percent tax deduction on business
income to owners of businesses with fewer than 500 employees.
Republicans are portraying that tax cut as one for “small
businesses,” a group they say the Buffett Rule will harm
Democrats say the legislation will add to already huge
budget deficits, since Republicans do not include any measures
to offset the $46 billion revenue loss. And they cite studies
showing that the tax cut will mainly go to those with incomes
over $200,000 a year.
That measure is not likely to make it through the Senate.
For a Q&A; on the Buffett Rule: see
BATTLE ESCALATING
The battle over taxes has been escalating for weeks with the
White House speaking nearly daily about the Buffett Rule.
The Obama campaign played offense last week by releasing the
president’s tax returns several days before the deadline, to put
pressure on Republican presidential candidate Mitt Romney.
Obama and his wife paid about 20.5 percent of their income
in taxes in 2011, compared to an estimated 15.4 percent rate
paid by the Romney’s.
Romney, however, has asked for an extension to file his
taxes.
A Gallup poll out on Monday said that Americans are split
fairly evenly between those who say their federal tax bill is
fair and those who say they pay too much.
But when asked specifically about how the wealthy are taxed,
about 60 percent back some kind of Buffett Rule, Gallup’s
surveys have found.
“It is a robust finding across whichever polls that ask, you
usually get 60 percent plus that say, ‘yes, higher income are
paying too little,'” Frank Newport, editor in chief of Gallup
polling, said.
The polling, telephone interviews with about 1,000 adults,
has a margin of error of 4 percentage points.
