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US economy: New Obama plan to tax wealthiest
President Barack Obama faces an election year with unemployment stubbornly high
US President Barack Obama is planning a higher minimum tax rate on the richest Americans to ensure they are taxed at the same rate as the less wealthy.
White House officials said Mr Obama would provide details of his proposal on Monday when he reveals his long-term plan to reduce the budget deficit.
Reports say the proposal is to be called the Buffett Rule, after the billionaire investor Warren Buffett.
Mr Buffett says loopholes mean the richest pay relatively less tax.
This is because earnings from investments are taxed at lower rates than wages.
The proposed new tax would affect Americans who earn more than $1m a year.
The proposal is likely to meet a strong challenge in Congress, where Republicans have said they oppose any tax increases.
The US economy has been growing only slowly while the unemployment rate remains stubbornly high, above 9%. Facing an election next year, Mr Obama has had a battle in Congress over how to reduce the ballooning deficit while the economy remains stagnant.
A Congressional "supercommittee" of six Republicans and six Democrats has been charged with finding steep reductions in the deficit by late November, when automatic cuts come into force.
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Comment number 210.
visew18th September 2011 - 19:12
I have a small business. A few thousand dollars tax cut won't make me hire another employee if nobody is going to buy our products. I would rather see other people have more money to spend, to buy our products so I can be more confident to produce more or hire more.
The rich won't use their tax cut to buy anything to help the economy run. They have everything. They just put it in bank or in stock
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Comment number 173.
Michael S Dow18th September 2011 - 16:32
Returns on investments should be taxed at the same rate as earned income. Those of us who come from rich families shouldn't get a special 'club members' discount.
We should also raise the inheritance tax. Too much concentrated wealth passed between generations undermines democracy.
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Comment number 172.
Glen Haig18th September 2011 - 16:43
The American dream seems to have been twisted to the point where the rich get a free ride when it comes to the tax system, while the less wealthly get hammered. Republicans call tax rises for the wealthy a tax on success, when the reality is that the rich aren't paying their fair share at present.
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Comment number 163.
clamdip lobster claws18th September 2011 - 16:19
It's a great idea. He should also not allow corporations who go offshore acess to the American consumer. The rich have had a free ride for far too long on the backs of the poor and middle class and its time to stop it. He should also tax the huge underground economy. The American worker can rebuild America back to its former glory after we get rid of the corporate parasites who whine and beg.
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Comment number 100.
Martin8118th September 2011 - 14:13
Some people seem to believe that because the rich will now have to pay tax at the same rate as everybody else there will be less incentive to expend their business to make more money, and thus create jobs. Nonsense. They will still have the ability to make money they'll just be contibuting their fair share.
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Comments 5 of 9