WEALTHY AMERICANS should pay a larger share of their income in taxes than middle-class households. And any given million-dollar earner should pay about the same share of income in taxes as the next one. The “Buffett Rule” makes sense as a matter of both kinds of tax fairness.
But whatever the moral — and political — allure of President Obama’s pitch for the rule, it addresses a remarkably small problem. The version of the Buffett Rule that the Senate is expected to take up next week — and on which Mr. Obama has been focusing his reelection campaign — would essentially set an alternative minimum tax rate of 30 percent for households earning more than $1 million a year. The Tax Policy Center estimates that this version, sponsored by Sen. Sheldon Whitehouse (D-R.I.), would affect 116,000 households in 2015. Because of that small number — and because the tax would be gradually increased as income rose from $1 million to $2 million — the tax would bring in a scant $47 billion over 10 years, assuming that the Bush tax cuts for upper-income earners expire on schedule. (If the tax cuts are extended, the Buffett Rule would affect more households — 217,000 — and therefore bring in more revenue.) You read that right: $47 billion over 10 years. Less than $5 billion a year.