With yesterday having been "tax day," both Republicans and Democrats made sure that during this week, when all Americans are thinking "taxes," to introduce legislation that reflects their party’s tax and economic agenda.
President Barack Obama’s “Buffet Rule” has been the big headline among the media and Democrats widely support the president’s proposal. The Senate bill S. 2230, the "Paying the Fair Share Act," was nicknamed the “Buffett Rule” after billionaire Warren Buffett admitted paying a lower effective tax rate than his secretary. The bill would require all Americans that make more than $1 million a year to pay a minimum tax rate of 30 percent. On Monday, however, Senate Democrats failed to obtain the 60 votes needed to invoke cloture on a motion to consider the bill on the Senate floor. While the Buffet Rule is likely to be a talking point during the 2012 presidential election, it’s legislative path forward is effectively dead, as House Republicans are refusing to bring it forward for a vote.
On the other side of Congress, the House this week is expected to pass, the Small Business Tax Cut Act, a bill that was introduced by Majority Leader Eric Cantor (R-Va.). This bill would give a 20 percent tax deduction to businesses with less than 500 employees. The Republicans say that the bill will encourage businesses to reinvest and create more jobs. Democrats oppose this measure because they believe that it is just another effort by Republicans to "cut taxes for the wealthy." Once the bill reaches the Democratic-led Senate, it – like the Democractic-introduced Buffet Rule – is expected to die.
Both political parties know that there is little chance for either of their bills to go anywhere during an election year, so why even try? Their reasons are more to highlight what each party’s agenda will be following the 2012 elections. In addition, neither bill will have a large impact on the economy. The Buffett Rule will only bring in about $5 billion per year in revenue, which is a small number compared to the trillion in debt a year and is building. The Small Business Tax Cut Act, according to the Congressional Budget Office, would actually create very few new jobs, because most businesses will most likely just pocket the deduction. In any case, Republicans and Democrats are setting the stage for the upcoming elections starting with their tax policy goals.