The Senate kills Obama's "Buffet Rule"

Republicans block debate on minimum tax rate but polls show public support.

US billionaire Warren Buffett's famous observation that he pays less tax than his secretary gave Barack Obama the political opening he needed to shift the tax debate to the left. The US President proposed a minimum tax rate of 30 per cent for those earning over $1 million (£630,000) a year, a measure that became known as the "Buffet Rule" (the inspiration for Nick Clegg's "tycoon tax").

But last night the resultant bill - the Paying a Fair Share Act 2012 - was blocked after the Senate voted not to open debate on it. The chamber backed the measure by 51 votes to 45 but this was nine short of the 60 votes the Democrats neeeded to overcome a Republican filibuster. In total, forty four of the 47 Senate Republicans voted against a debate, with just one - Senator Susan Collins of Maine - voting in favour.

Obama responded by arguing that "It's just plain wrong that millions of middle-class Americans pay a higher share of their income in taxes than some millionaires and billionaires." But he will be comforted by the knowledge that it is the Democrats, not the Republicans, who are on the right side of public opinion. A CNN poll published yesterday showed that 72 per cent of the US electorate, including 53 per cent of Republicans, support the Buffet Rule. As Charles E. Schumer, the Democratic Senator for New York, observed, for the first time in decades, the GOP is on the defensive on the signature issue of taxation.

Uncomfortably for the Republicans, their presidential candidate of choice - Mitt Romney - is a major beneficiary of the current system. As his 2011 tax return revealed, he paid an effective rate of just 15 per cent on an income of $20.9m. Obama paid 20.5 per cent on an income of $789,674, a lower rate than many US voters but higher than Romney. Moreover, the President can point to the fact that he is at least trying to solve the problem. As the White House noted:

Under the president's own tax proposals, including the expiration of the high-income tax cuts and limitations on the value of tax preferences for high-income households, he would pay more in taxes while ensuring we cut taxes for the middle class and those trying to get in it

Unsurprisingly, then, Romney is under pressure to release his tax returns for before 2010. The longer the Democrats can keep this story on the front pages, the better for Obama. Romney may quip that the Buffet Rule would only raise enough to fund the government for 11 hours but he should never underestimate the symbolic force of taxation.

Barack Obama speaks during a visit to the Port of Tampa on April 13, 2012 in Florida. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Who will win in Stoke-on-Trent?

Labour are the favourites, but they could fall victim to a shock in the Midlands constituency.  

The resignation of Tristram Hunt as MP for Stoke-on-Central has triggered a by-election in the safe Labour seat of Stoke on Trent Central. That had Westminster speculating about the possibility of a victory for Ukip, which only intensified once Paul Nuttall, the party’s leader, was installed as the candidate.

If Nuttall’s message that the Labour Party has lost touch with its small-town and post-industrial heartlands is going to pay dividends at the ballot box, there can hardly be a better set of circumstances than this: the sitting MP has quit to take up a well-paid job in London, and although  the overwhelming majority of Labour MPs voted to block Brexit, the well-advertised divisions in that party over the vote should help Ukip.

But Labour started with a solid lead – it is always more useful to talk about percentages, not raw vote totals – of 16 points in 2015, with the two parties of the right effectively tied in second and third place. Just 33 votes separated Ukip in second from the third-placed Conservatives.

There was a possible – but narrow – path to victory for Ukip that involved swallowing up the Conservative vote, while Labour shed votes in three directions: to the Liberal Democrats, to Ukip, and to abstention.

But as I wrote at the start of the contest, Ukip were, in my view, overwritten in their chances of winning the seat. We talk a lot about Labour’s problem appealing to “aspirational” voters in Westminster, but less covered, and equally important, is Ukip’s aspiration problem.

For some people, a vote for Ukip is effectively a declaration that you live in a dump. You can have an interesting debate about whether it was particularly sympathetic of Ken Clarke to brand that party’s voters as “elderly male people who have had disappointing lives”, but that view is not just confined to pro-European Conservatives. A great number of people, in Stoke and elsewhere, who are sympathetic to Ukip’s positions on immigration, international development and the European Union also think that voting Ukip is for losers.

That always made making inroads into the Conservative vote harder than it looks. At the risk of looking very, very foolish in six days time, I found it difficult to imagine why Tory voters in Hanley would take the risk of voting Ukip. As I wrote when Nuttall announced his candidacy, the Conservatives were, in my view, a bigger threat to Labour than Ukip.

Under Theresa May, almost every move the party has made has been designed around making inroads into the Ukip vote and that part of the Labour vote that is sympathetic to Ukip. If the polls are to be believed, she’s succeeding nationally, though even on current polling, the Conservatives wouldn’t have enough to take Stoke on Trent Central.

Now Theresa May has made a visit to the constituency. Well, seeing as the government has a comfortable majority in the House of Commons, it’s not as if the Prime Minister needs to find time to visit the seat, particularly when there is another, easier battle down the road in the shape of the West Midlands mayoral election.

But one thing is certain: the Conservatives wouldn’t be sending May down if they thought that they were going to do worse than they did in 2015.

Parties can be wrong of course. The Conservatives knew that they had found a vulnerable spot in the last election as far as a Labour deal with the SNP was concerned. They thought that vulnerable spot was worth 15 to 20 seats. They gained 27 from the Liberal Democrats and a further eight from Labour.  Labour knew they would underperform public expectations and thought they’d end up with around 260 to 280 seats. They ended up with 232.

Nevertheless, Theresa May wouldn’t be coming down to Stoke if CCHQ thought that four days later, her party was going to finish fourth. And if the Conservatives don’t collapse, anyone betting on Ukip is liable to lose their shirt. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.