This past weekend, the White House floated a new principle called the "Buffett rule" that would require millionaires to pay a greater share of their income than the middle class. It's named after Warren Buffett, the billionaire investor who often makes the point that he pays a lower effective tax rate than his secretary. (Since he makes more of his income from tax-preferred investments than a typical salary, he pays a lower share of his overall income through payroll and individual income taxes.)
The Buffet Rule caused a stir online since conservatives complained that it represented class warfare -- as if reinforcing the contours of a progressive income tax were an act of war. Since President Obama did not mention it in his deficit speech this morning, it's fair to say the rule represents more of a guiding principle than a concrete policy measure.
But even as a guiding principle, it polls spectacularly well. More than 20 polls consulted by Bruce Bartlett reveal support for higher taxes in a deficit reduction deal, and the public prefers those higher taxes to disproportionately affect the rich. The White House can't run on a healthy recovery yet, and it won't run on spending cuts. The alternative is to turn 2012 into a referendum on the role of government and the responsibilities of the wealthy.
It's a clear choice. Republicans voted to voucherize Medicare and have refused to raise taxes. Democrats want to preserve Medicare and Social Security and have offered to pay for it by raising taxes on richer households. (I'd prefer a combination -- long-term entitlement reform and higher taxes for more than the top two percent, but the opening rounds of a negotiation are no time for open moderates.)
The Buffett Rule isn't a law so much as a foreshadowing. This is the debate the White House wants to have in the next year. This is the debate it thinks it can win.