WASHINGTON, D.C. – Billionaire investor Warren Buffett has said he pays a lower percentage of his income in taxes than his secretary.  As millions of Americans filed their taxes yesterday, U.S. Senators Sherrod Brown (D-OH) and Sheldon Whitehouse (D-RI) introduced legislation to fix this problem.  The Paying a Fair Share Act would ensure multi-millionaire and billionaire taxpayers like Warren Buffett pay at least a 30 percent effective tax rate. 

“There’s no reason why the richest people in the country should be paying less in taxes than the workers that they employ. Period,” said Brown. “Corporate greed is fundamental to the Wall Street business model and until we change that, the richest people in the country are going to continue exploiting loopholes so they don’t have to pay their fair share.”

In 2018 the highest-earning 0.001% of Americans – making an average of $167 million each – paid an average effective federal tax rate of just 23 percent, far short of the top marginal rate of 37 percent. The Paying a Fair Share Act would apply only to taxpayers with income over $1 million, including capital gains and dividends, and would phase in over their second million dollars in income. The bill includes language to preserve the incentive for charitable giving.

Joining Brown and Whitehouse on the bill as original cosponsors are Senators Dick Durbin (D-IL), Elizabeth Warren (D-MA), Ed Markey (D-MA), Amy Klobuchar (D-MN), Dianne Feinstein (D-CA), Tammy Baldwin (D-WI), Jack Reed (D-RI), Chris Van Hollen (D-MD), Patrick Leahy (D-VT), Cory Booker (D-NJ), Richard Blumenthal (D-CT), Mazie Hirono (D-HI), Kirsten Gillibrand (D-NY), Bernie Sanders (I-VT), and Jeff Merkley (D-OR).

Last week, Brown introduced tax reform legislation to close the carried interest tax loophole that benefits wealthy money managers on Wall Street. Currently, the carried interest loophole allows investment managers to pay the lower 20 percent long-term capital gains tax rate on income received as compensation, rather than the ordinary income tax rates of up to 37 percent that they would pay for the same amount of wage income. The Carried Interest Fairness Act will require carried interest income to be taxed at ordinary rates. According to the Joint Committee on Taxation, closing this loophole will raise $15 billion in revenue over 10 years. 

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