Nothing is more important to Congress than reducing income inequality. —Majority Leader Harry Reid
WASHINGTON — President Barack Obama's Democratic allies in the Senate promised Wednesday to press ahead this year with legislation drawn from his plans to require millionaires pay at least 30 percent in taxes and curb tax preferences for companies that ship jobs overseas.
Senate Democratic leaders promise votes soon on such tax "fairness" initiatives, which were a key theme of Obama's State of the Union address Tuesday night. They include the so-called Buffett rule, named after a recommendation by billionaire financier Warren Buffett — who benefits from a low 15 percent tax rate on investments — that he be required to pay a higher rate than his secretary.
The Democratic drive would build on last year's push to renew the payroll tax cut. The initiative is laced with politics, coming immediately after GOP presidential candidate Mitt Romney revealed that he pays an effective tax rate of less than 15 percent despite income exceeding $20 million a year.
"The president's blueprint for restoring economic fairness for the middle-class will be the basis of our agenda for this year," said Sen. Charles Schumer, D-N.Y. Schumer said the decision by Republicans to embrace the payroll tax cut last year despite widespread reservations within the party bodes well for the upcoming debate.
"Don't underestimate our chances of success," Schumer said.
Both Democrats and Republicans embrace the idea of reforming the tax code but they differ over whether it should be done in a way that generates greater overall tax receipts as Democrats demand or whether it should be "revenue neutral" as most Republicans would like.
Among the ideas endorsed by the Democratic leaders Wednesday was Obama's proposal to require millionaires to pay a higher minimum tax rate, deny corporations such as General Electric the ability to evade taxes and reward companies that create jobs in America instead of shipping them overseas.
"Nothing is more important to Congress than reducing income inequality," said Majority Leader Harry Reid, D-Nev.
On a campaign swing in Florida, Newt Gingrich said Obama's proposal for a 30 percent tax rate for millionaires "would be a disaster of the first order."
Added Gingrich: "It would double the capital gains tax. Doubling the capital gains tax would lead to a dramatic decline in the stock market, which would affect every pension fund in the United States."
Associated Press writer Brian Bakst in Doral, Fla., contributed to this report.