A proposed 30 percent minimum tax on millionaires backed by President Barack Obama -- dubbed the 'Buffett tax' after investor Warren Buffett who supports it -- would raise about $31 billion over a decade, said a congressional report released on Tuesday.
That's far less than the $1 trillion or more that would be lost from scrapping the alternative minimum tax, The AMT is also meant to be a minimum tax on the wealthy. Democrats have said that the Buffett tax could replace the AMT.
The Buffett tax would raise $30.7 billion from 2012 through 2022 if imposed on taxpayers earning more than $1 million, or $500,000 for married individuals filing separately, according to a March 19 memo from the Joint Committee on Taxation, a nonpartisan body that estimates tax changes for lawmakers.
The Buffett tax proposal has little chance of passing with Republicans in charge of the House of Representatives, and its prospects in the Democratic-controlled U.S. Senate are murky.
Still, taxes are a major topic on the campaign trail with Republicans fighting amongst themselves for the chance to take on Obama in his re-election bid this November.
The AMT is intended to keep the rich from avoiding taxation. But the AMT has been squeezing less wealthy individuals for years, in part because it is not indexed for inflation and tax rates have dropped.
"The president's so-called Buffett Rule is a dog that just won't hunt," said Senator Orrin Hatch, top Republican on the tax writing Senate Finance Committee. He requested the JCT estimate.
Senator Sheldon Whitehouse, a Democrat who has sponsored legislation embodying a Buffett tax, said estimates from other groups found more revenue, including $171 billion forecast by the Citizens For Tax Justice, a liberal leaning tax group.
"Most important: it's simply the right thing to do," Whitehouse said.
(Reporting By Kim Dixon; Editing by Kevin Drawbaugh and Steve Orlofsky)