U.S. Senators Mazie K. Hirono of Hawaii and Sheldon Whitehouse of Rhode Island have reintroduced the Paying a Fair Share Act. This legislation aims to ensure that millionaires pay higher tax rates than middle-class Americans by imposing a 30-percent minimum tax on individuals with incomes above $1 million. The act finds its roots in billionaire Warren Buffett's critique of the tax system, where he noted paying a lower tax rate than his secretary.
"Working families shouldn’t be paying more in taxes than billionaires—period," stated Senator Hirono. "This legislation will help ensure that the wealthiest Americans are paying their fair share in taxes and limit their ability to weasel out of paying taxes in the future. I’m proud to join my colleagues in introducing this bill to promote fairness in our tax code and hold the wealthiest in our country accountable."
Data from 2022 reveals that the top 0.001% of earners, about 1,538 households, paid an average federal tax rate of 23.5 percent, which is less than the top marginal rate of 37 percent. This average is comparable to rates paid by professions like iron and steel workers or high school special education teachers in Rhode Island.
The proposed bill targets the highest-earning Americans with an income exceeding $1 million, which includes capital gains and dividends. It effectively impacts around 0.58% of taxpayers as of 2024. There is also a provision for those earning between $1 million and $2 million to gradually increase their tax liability while maintaining incentives for charitable contributions.
Projected to generate nearly $120 billion in revenue over the next decade, the act aims to serve as a safeguard against future tax avoidance by affluent individuals.
Senators Jeff Merkley, Richard Blumenthal, Chris Van Hollen, Dick Durbin, Amy Klobuchar, Jack Reed, Bernie Sanders, Tammy Baldwin, Elizabeth Warren, Cory Booker, Peter Welch, and Tina Smith co-sponsored the legislation. U.S. Representative Brendan Boyle also introduced the bill in the House of Representatives.
The detailed content of the bill is publicly accessible.