Obama seeks new 'Buffett Rule' wealth tax

Barack Obama is expected to seek a new base tax rate for the wealthy to ensure that millionaires pay at least at the same percentage as middle-income taxpayers.

Barack Obama is expected to seek a new base tax rate for the wealthy to ensure that millionaires pay at least at the same percentage as middle-income taxpayers.

A White House official said the proposal would be included in the US president’s proposal for long-term deficit reduction that he will announce tomorrow.

The measure would be in addition to $447bn in new tax revenue that Mr Obama is seeking to pay for his short-term spending and tax cutting plan to jump-start the economy.

House of Representatives speaker John Boehner said on Thursday that he would oppose tax increases to reduce the deficit. Mr Boehner has urged the US Congress’ deficit “supercommittee” to lay the groundwork for a broad overhaul of the country’s tax code.

The panel has almost unlimited authority to recommend changes in government spending and taxes and is working against a deadline of November 23.

Mr Boehner said the panel had “only one option, spending cuts and entitlement reforms”, a reference to massive benefit programmes such as Social Security, Medicare and Medicaid.

Any broad compromise that clears the bi-partisan committee is almost certain to require Democratic agreement to savings from programmes such as the Social Security pension scheme, along with Republican agreement to additional revenues. However, any such trade-offs are rarely discussed openly until the last possible moment in negotiations.

Mr Obama’s new tax proposal was first reported by the New York Times.

Mr Obama is going to call it the "Buffett Rule" after Warren Buffett, the billionaire investor who has complained that rich people like him pay a smaller share of their income in federal taxes than middle-class taxpayers.

Mr Buffett wrote in a New York Times opinion piece piece last month that he and his rich friends “have been coddled long enough by a billionaire-friendly Congress”.

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