President Obama's proposed 'Buffett Rule' and the 'Millionaire Surtax' recently put forward by Senate Democrats share a common theme: require millionaires and billionaires to shoulder a larger proportion of the nation's tax burden.
They are not, however, exactly the same.
During his news conference this morning, Obama drew a clear distinction. The 'Buffett Rule' targets wealthy Americans who are paying a lower overall tax rate because some or all of their income is from investments that are taxed at the 15 percent capital gains rate. That's roughly half the rate on income from a salary.
The president's support of the 'Buffett rule' is part of his call for a longer-term reform of the tax system to close "loopholes" and "special interest tax breaks" while lowering overall rates.
The Obama Administration did not include the 'Buffett Rule' in its plan to pay for a more immediate goal, the American Jobs Act.
Senate Democrats did add a provision to the jobs bill that would cover its costs with a five- percent surtax on "millionaires." That surtax would be imposed on all adjusted gross income above $1 million — including, but not limited to, income from capital gains and dividends.
Today the president said he would be "comfortable" with the approach being taken by Democrats in the Senate to pay for the jobs bill:
CHUCK TODD, NBC News:
Do we assume by how you're talking about the bill in the Senate that you are OK with the change in how to pay for it, the surtax, the 5.6% surtax, on millionaires.
We've always said we would be open to a variety of ways to pay for it. We put forward what we thought was a solid approach to paying for the jobs bill itself.
Keep in mind though, that what I've always said, is that not only do we have to pay for the jobs bill, we also still have to do more in order to reduce the debt and the deficit. So, the approach that the Senate is taking, I'm comfortable with in order to deal with the jobs bill.
We're still going to need to reform this tax code to make sure that we're closing loopholes, closing special interest tax breaks, making sure that the very simple principle, what we call the Buffett Rule, which is that millionaires and billionaires aren't paying lower tax rates than ordinary families, that that's in place.
So, there's going to be more work to do with respect to making our tax system fair and just, and promoting growth. But in terms of the immediate action of getting this jobs bill passed, I'm fine with the approach that they're taking.
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