The Buffett Rule: Gimmick or Good Start?

The Senate returns from a two-week recess today, and one of the first items on their agenda is the so-called “Buffett Rule,” a tax reform aimed at millionaires that would make anyone earning $1 million or more a year pay at least 30 percent of their income in taxes.

The rule, an Obama administration proposal, was based on Warren Buffett’s complaint that his tax rate was less than his secretary’s. Republican lawmakers have called the proposal a “political sideshow” and a job killer. This morning, Texas Senator John Conryn called it a “Trojan horse” (there’s a lot of those in Washington these days).

“This is not just targeted at the very rich, and you know what [Bret], what we also need to do is look at why is it that half of the households in America pay zero income tax,” Cornyn said after questioning the past expansion of the Alternative Minimum Tax. “We need some real tax reform. This isn’t it, this is a gimmick.”

Almost everyone agrees that the bill will go nowhere this afternoon. Republicans plan to filibuster and Democrats don’t have the 60 votes to proceed.

Even if the bill were to pass and become law, many say that it wouldn’t actually do a whole lot to address the deficit or lessen the tax burden on the middle class anyway.

As Simon Johnson writes in the Baseline Scenario:

The Buffett Rule is a tiny tax, of little consequence to the people who would pay it or to the country as a whole. The idea that $30 billion of additional revenue would tip the balance in any way is simply ludicrous.

But this is precisely what gives the Buffett Rule its powerful symbolism. …

BusinessWeek’s Joshua Green writes that if the Republicans do strike down the Buffett Rule, it may make the bill more powerful in the long run.

Legislatively speaking, that means the bill will die a swift death. But the Buffett Rule will probably be more powerful in death than it was in life, because Republicans will have to cast a politically unpopular vote to strike it down—they’ll have to put themselves on record as favoring a tax system where the Mitt Romneys of the world pay a rate of only 13.9 percent (eventually, that is…after they get an extension).

According to a recent Gallup Poll, 6 in 10 Americans favor it. What’s your take on the Buffett Rule? Political distraction or meaningful start at reform?