Republicans offer their own Buffett Rule to help pay down the federal debt

October 13, 2011

First Warren Buffett wrote a newspaper piece saying he and his fellow millionaires don't pay enough income taxes.

Then President Obama included a millionaires' tax in his jobs bill, dubbing it the Buffett Rule.

Now Republicans have adopted that moniker for a deficit specific revision to income tax returns.

Sen. John Thune (R.-S.D.) has introduced S. 1676, The Buffett Rule Act of 2011, which would add a line on 1040s so that taxpayers could more easily donate money to Uncle Sam. An identical version of the bill, H.R. 3099, was introduced in the House by Steve Scalise (R-La.).

"If individuals like Warren Buffett or President Obama are inclined to donate their own personal money toward paying down the federal government's debt, they ought to have that right to do so voluntarily," said Thune in a statement. "This bill would make it easier for those wealthy individuals who feel they are currently under-taxed to pay more to the U.S. Treasury above and beyond their current obligations, without raising taxes on America's job creators."

"You can put your money where your mouth is. That's what this bill does," said Scalise of his legislation.

Debt payments already possible: Individuals already can make such payments by including a separate check, payable to the Bureau of the Public Debt, with their tax returns or by sending the money directly to the Bureau's office in Parkersburg, W.Va.

Or if you prefer, you can make a contribution online either by credit card, checking or savings account at Pay.gov.

These contributions to the U.S. Treasury can be deducted as charitable gifts if the donating taxpayer itemizes.

There has been some concern, however, that this extra money doesn't directly reduce the federal deficit.

Thune's and Scalise's legislation would make it clear the payments were for deficit reduction. Their bills would require that additional payments made via the special tax form line go to a fund dedicated to paying down the national debt.

Posturing over policy: Of course, neither member of Congress expects his bill to be enacted. Rather, the proposals are just the latest shots in the who should pay how much tax battle that's being waged on Capitol Hill.

As for the man whose name is attached to tax proposals from both sides of the political aisle, the Berkshire Hathaway executive appears to be taking all the Buffett bills in stride.

While the Obama measure isn't exactly what Buffett suggested — he's talking about raising taxes on capitals gains, not wage income — he said he didn't have a problem with his name being attached to the millionaires' tax.

And what about those voluntary deficit reduction payments?

"I would say if you have a country with a deficit of over a trillion dollars and you think it can be solved by voluntary tax payments, you sort of believe in the tooth fairy," Buffett told Fox Business following the publication in August of his tax the rich more opinion piece.

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