The Bucket and Buffett Approaches to Raising Taxes on High-Income U.S. Individuals

14 Pages Posted: 10 Dec 2012 Last revised: 17 Jan 2013

See all articles by Daniel Shaviro

Daniel Shaviro

New York University School of Law

Date Written: December 10, 2012


In the aftermath of the 2012 U.S. presidential election, while there is increasing consensus that high-income individuals’ taxes should increase, there is considerable disagreement about how this might best be done. In particular, while some favor raising upper-bracket marginal income tax rates, others prefer an approach that I call distributionally selective base-broadening. Here the idea is to restrict or deny the benefit of various tax preferences in such a way as to target the impact of the base-broadening on high-income individuals who have such items. An inevitable byproduct of such an approach is that different individuals will in effect face different tax bases.

This brief article, prepared for a forthcoming tax policy forum in the Canadian Tax Journal, assesses two such approaches that have received recent attention. The first is a “bucket” approach to limiting the use of particular tax preferences, endorsed by the 2012 Romney campaign. The second is the so-called “Buffett tax,” endorsed at one point by the Obama Administration. It argues that, while either might conceivably be better than politically feasible alternatives, they have significant defects that should be kept in mind as well. Indeed, in some respects both bring to mind the much-reviled alternative minimum tax.

Keywords: Tax reform, base-broadening, Buffett tax, progressivity, deduction disallowance

JEL Classification: H20, H24

Suggested Citation

Shaviro, Daniel, The Bucket and Buffett Approaches to Raising Taxes on High-Income U.S. Individuals (December 10, 2012). Canadian Tax Journal/Revue Fiscale Canadienne, Forthcoming, NYU School of Law, Public Law Research Paper No. 12-68, NYU Law and Economics Research Paper No. 12-44, Available at SSRN: or

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New York University School of Law ( email )

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