The Issue
A “blueprint” released by the White House following President Obama's 2012 State of the Union address, included a proposed overhaul of the tax code that would ensure that households making more than $1 million pay an effective tax rate of at least 30 percent — a so-called "Buffett Rule." The blueprint suggests that the proposal could be implemented without “disadvantaging individuals who make large charitable contributions.”

President Obama's FY 2013 budget request also includes mention of the Buffett Rule as a principle for broader tax reform.

LATEST NEWS
The Senate held a key procedural vote April 16, 2012 on legislation (S. 2230) to implement the Buffett Rule. The motion to proceed failed 51-45, falling nine votes short of the threshold needed to move forward. Despite the defeat, Senate Democrats have indicated that they will continue to push for votes on the Buffett Rule for the remainder of the year.

The White House National Economic Council (NEC) released a report April 10, 2012 that argues that the “Buffett Rule,” which imposes a minimum 30 percent tax on households earning more than $1 million per year, is needed as part of efforts to reduce income inequality. According to the report, 8 percent of the 400 highest-income Americans have an effective federal income tax rate of less than 10 percent and one-third pay less than 15 percent.

In response to the NEC report, Senate Finance Committee Republicans April 12, 2012 released a "Dos and Don'ts of the Buffett Tax" fact sheet to make the case that the Buffett Rule would not have a net positive economic impact.

Legislation in the 112th Congress
Senate
Senator Sheldon Whitehouse (D-RI) has introduced legislation (S.2059) that would apply the so-called “Buffett rule” that President Obama announced in his State of the Union. The Paying a Fair Share Act would apply a minimum 30% income tax rate for taxpayers with adjusted gross incomes above $1 million. The bill maintains current incentives for charitable giving, and would permit wealthy taxpayers to continue to receive a credit equal to the value of the charitable contributions deduction under the regular income tax.

The legislation was reintroduced March 22, 2012 as S. 2203.

The Joint Committee on Taxation (JCT) has estimated that S. 2059 would raise $46.7 billion over 10 years.

House
Representative Tammy Baldwin (D-WI) has introduced a companion bill in the House (H.R.3903).

IS Position
IS Letter on the Buffett Rule's Treatment of Charitable Giving
Independent Sector sent a letter to Sen. Sheldon Whitehouse (D-RI) and Rep. Tammy Baldwin (D-WI), as well as all of the original co-sponsors of the Senate and House versions of the Paying a Fair Share Act, to show our appreciation for the specific provision that carves out the charitable deduction for preservation under the Buffett Rule. The letter does not take a position on the broader legislation and includes the names of almost 50 nonprofit organizations from around the country.