On behalf of more than two million Americans for Prosperity activists in all 50 states, I write to express our strong opposition to the so-called “Fair Share Tax” included in Senator Warren’s higher education legislation (S. 2432), commonly known as the Buffett Rule. This legislation is a tax hike bill disguised as an education bill, and I urge you to reject it.
This tax would phase in a 30 percent minimum tax rate for those with adjusted gross incomes between $1 and $2 million. According to the Joint Committee on Taxation (JCT), this provision would constitute a massive tax hike — $31.7 billion over the next five years and $72.5 billion over the next ten.
The damaging results of this tax hike would resonate throughout the economy, not just on top earners. This tax will defeat its stated goal of increasing income-class mobility because it will make it even difficult for low- and middle-income workers to climb up the income ladder. In the short term, the tax would discourage investment and business growth, which means fewer jobs across the income spectrum. The long-term picture looks even worse: Tax Foundation research shows that the stock market would take a major hit as people sell off their newly taxable assets.
This tax would have a particular impact on small businesses, since many pay their taxes through their owners’ individual income tax returns. This tax would affect an enormous portion of small businesses and force them to downsize or avoid new job creation. According to Americans for Fair Taxation, these “pass-through” businesses represent more than seventy-five percent of all small businesses. Ninety percent of pass-through businesses would be affected by the tax hike, according to a 2011 Treasury Department study and research from the Heritage Foundation.
Taxing top earners means less investment and less long-term economic growth. Americans for Prosperity urges you to reject the Fair Share Tax included in Senator Warren’s bill (S. 2432).
Christine Harbin Hanson
National Issue Campaign Manager
Americans for Prosperity