Wisconsin Rep. Paul Ryan, author of the House Republican budget plan that has become a rallying point for the GOP, said on Tuesday that people mistakenly believe that the “Buffett Rule” will be a magic bullet to attack the country’s deficit problems.
“I think people think the Buffett Rule is sort of budget pixie dust,” Ryan said on MSNBC’s Morning Joe. “If you do this, we are going to fix our fiscal problems.”
The controversial legislation, which is set to go to the Senate floor for a procedural vote next week, would establish a minimum effective tax rate of 30 percent on those who earn more than $1 million per year, including income from capital gains and dividends.
Ryan said that the Buffett Rule, named for billionaire investor Warren Buffett, would pay for only 6 percent of President Obama’s proposed deficit spending, an insignificant figure in the grand scheme of the debt crisis. Ryan also said that the legislation represents a tax increase on job creators. Instead of hitting “the hedge fund manager and the movie star,” Ryan said, the Buffett rule would actually hurt small-business owners.
The Buffett rule has been in the spotlight in recent weeks, with supporters arguing that wealthy Americans disproportionately benefit from the lower tax rates because they derive large amounts of income from investments rather than paychecks. For example, Republican candidate Mitt Romney said in January that he pays an effective tax rate of about 15 percent.
Ryan has been touted recently as a top candidate for vice president. The House Budget Committee Chairman endorsed the GOP front-runner last month, and has appeared with Romney on the campaign trail over the past few weeks.