SPARKS – President Barack Obama unveiled his deficit reduction plan this week, which includes a contentious new tax on millionaires that he is calling the “Buffet Rule,” after billionaire investor Warren Buffet.
Buffet recently penned an editorial for the New York Times calling on Congress to stop coddling the super-rich after he reported paying less in federal income taxes this year than his secretary did due to tax loopholes and lower rates on capital gains.
Obama has said the tax is necessary to ensure the rich are paying their fair share, but Republicans are calling the proposal “class warfare.”
“The problem is business owners and entrepreneurs need stability,” said Tray Abney, director of government relations for the local chamber of commerce, “and you don’t have that when every time you turn around there’s a threat of raising a tax on somebody …”
Republicans are concerned that the new tax would chill job growth in a time when jobs are already hard to come by for more than 9 percent of American workers.
But Democrats point to a growing gap between the rich and poor, which is at its widest margin ever, according to 2010 U.S. Census figures, as a need for the tax.
“We have to figure out a way to level the playing field,” said Jan Gilbert, co-founder of the liberal nonprofit Progressive Leadership Alliance of Nevada.
Gilbert said the Buffet Rule was a common sense proposal to raise revenues to support education, infrastructure projects and limit cuts to public health care services.
Gilbert said charges of class warfare were nothing more than a red herring.
But Abney and Republicans see it differently.
They believe the millionaire’s tax would only complicate an already bloated tax code.
In addition, Republicans point to the fact that nearly half of all workers pay no income taxes at all.
Democrats counter that middle class wages have remained stagnant for more than 20 years.
Abney said reforming the tax code could begin with having large corporations pay their fair share, rather than picking on a subset that he believes creates jobs.
For example, General Electric reportedly paid no federal income taxes in 2010 because of various loopholes.
But “any kind of tax is going to affect the job market,” Abney said.