U.S. Senate turns down Obama’s Wealth Tax Proposal

The U.S. Senate has blocked President Barack Obama’s proposal to raise tax rate on those who earn more than $1 million a year.

Despite the Democrats’ majority in the Senate, the lawmakers voted with a final tally of 51-45 on Monday, falling short of nine votes to move the debate on the so-called “Buffet Rule” forward.

The “Buffett Rule,” named in a reference to Warren Buffett, the billionaire investor who has repeatedly complained that the richest Americans generally pay a smaller share of their income in federal taxes than do middle-income workers, was intended to impose a minimum 30% tax rate on annual incomes beyond $1 million.

The current top income tax rate in the United States is now 35%, but many superrich Americans pay much less because of deductions and lower rates for income that comes from investments rather than earnings.

The wealth tax bill is largely considered a key element of Obama’s re-election campaign and part of the broad plan for long-term deficit reduction.

According to a recent Gallop poll, 60% of voters support Obama’s initiative saying that the wealthy must pay their “fair share.”

However, the opponents of the “Buffet Rule” claim that the new wealth tax would not slash the deficit or improve the employment situation, but would discourage investment, instead.

Political experts believe that the battle over the “Buffet Rule” is not over and will continue through the election campaign, which culminates in November, and beyond, according to RIA Novosti.