While the battle continues to rage over the government's plan to cap tax relief, on the other side of the Atlantic the US bill that inspired it has been killed. The ‘Paying a Fair Share Act 2012’ — more commonly known as the ‘Buffett Rule’ after billionaire Warren Buffett — failed to get the votes it needed to be debated in the Senate. It was backed by a majority of senators, with 51 voting ‘Yea’ to 45 ‘Nay’s, but fell short of the 60 votes needed to break a filibuster.
Fraser explained on Friday how Obama's efforts to ensure that — as the President puts it — ‘If you make more than a million dollars a year, you should pay the same percentage of your income in taxes as middle class families do’ inspired Nick Clegg's ‘Tycoon Tax’ proposal, which has in turn led to the current ‘charity tax’ debacle. Obama began pushing for the measure in September, inspired by Warren Buffett's statement that he shouldn't be paying a lower tax rate than his secretary. He's even invoked Republican hero Ronald Reagan's support for closing the loopholes exploited by the rich:
And the whole debate gained extra political potency in January, when Republican candidate Mitt Romney released his tax returns for the last two years. They showed him paying an effective tax rate of less than 15 per cent, and Obama's Vice President Joe Biden has since begun to contrast the Buffett Rule with Romney's fiscal policies:
‘The “Romney Rule” says that the very wealthy should keep every tax break and loophole they have and get additional new tax cuts every year that are worth more than what the average middle class family makes in a year.’