Lawmakers rejected the "Buffett Rule," a proposal that would have seen wealthy individuals pay a tax rate of at least 30 percent. The measure that needed 60 votes to move forward garnered 51 votes in the Democrat-controlled Senate
led by Harry Reid.
The proposed changes are named after billionaire investor Warren Buffett, who has complained that he pays a lower effective tax rate than his secretary.
Republicans say the tax increase is just a political gimmick Obama is using to pit Americans against each other.
Democrats argued the legislation would force government to treat the wealthy and middle class fairly, but at the end of the day, there weren’t enough votes to push it through the Senate. The vote was largely along party lines.
Democrats scheduled the vote a day before Americans' taxes were due, hoping a tax increase on the wealthy would echo Obama’s election theme of raising taxes on millionaires.
"They shouldn't be allowed to hide behind tax loopholes that rig the system in their favor," Reid said.
Senate Minority Leader Mitch McConnell, R-Ky., said the legislation would do virtually nothing to fix the economy or stem the federal budget's massive deficits, and was an attempt by the Obama campaign and his fellow Democrats to mask those problems.
"The problem is, we've got a president who seems more interested in pitting people against each other than he is in actually doing what it takes to face these challenges head-on and to solve them in a bipartisan manner," said Republican Senate leader Mitch McConnell .