By Alexander Bolton - 01/25/12 07:25 PM EST
Senate Democratic leaders will peg their 2012 legislative agenda to President Obama’s State of the Union address and make Mitt Romney the centerpiece of their push to raise taxes on the wealthy.
Democratic leaders say Romney’s tax returns, which show he and his wife paid a 14 percent tax rate on $27 million in income in 2010, have thrust him into the middle of the Senate debate. Romney earned nearly $43 million over the past two years and will pay just over $6 million in taxes.
Senate Majority Leader Harry Reid (D-Nev.) said Romney’s tax returns, made public Tuesday, show Congress needs to act on tax reform.
In his speech, Obama did not mention Romney by name, but called for high taxes on millionaires who pay a relatively low percentage of their income in taxes.
“The disclosure of Mitt Romney’s tax returns makes him a player in this conversation,” said Senate Democratic Whip Dick Durbin (Ill.).
Obama said people earning more than $1 million a year should not pay less than 30 percent in taxes, a proposal akin to what Democrats have called the “Buffett Rule,” after billionaire Warren Buffett, who has questioned the fairness of letting rich investors pay lower tax rates than middle-income workers.
“We agree with the president that it makes no sense that a millionaire should pay a lower tax rate than a secretary, so it’s a priority for us to act on some kind of Romney — I mean ‘Buffett Rule’ this year,” said Sen. Charles Schumer (N.Y.), the third-ranking Senate Democrat, in what appeared to be an intentional slip of the tongue.
Schumer said Senate Democrats would try to implement Obama’s proposals for tax reform, and predicted Republicans might feel compelled to cooperate to avoid the same kind of public backlash they felt during the fall’s payroll tax cut debate.
“We will pursue tax reform that makes sense for the middle class,” said Schumer. “We intend to pursue a different kind of tax reform that borrows from the president’s proposals.”
Senate Democrats will push legislation that sets a minimum rate of taxation for earners who make more than $1 million a year and to close special tax breaks that have allowed major multinational corporations such as General Electric to avoid federal taxes.
Obama said multinational companies should have to pay a basic minimum tax and the money should pay for lowering taxes for others.
Schumer said Democrats will attempt to change the tax code to eliminate incentives for companies that transfer manufacturing facilities and jobs overseas.
Senate Democrats also plan to let the Bush-era tax rates for millionaires lapse to the levels they were in the 1990s. They are due to expire at the end of the year.