Obama pushes 'Buffett rule' tax rise plan
- 10 April 2012
- From the section US & Canada
US President Barack Obama has renewed calls for a new tax on wealthy Americans as he seeks to define his position for the upcoming election.
Mr Obama called for the rich to pay a "fair share", ahead of a vote in the US Senate on the so-called "Buffett Rule".
The rule is named after billionaire investor Warren Buffett, who has said he should pay a higher rate of tax than his secretary.
The Senate proposal puts a minimum 30% tax on earnings over $1m (£631,000).
While the US tax rate on top earners is 35%, many wealthy investors earn investment income, taxed at 15%, and pay an overall smaller percentage of their earnings in taxes.
At a speech at Florida Atlantic University in Boca Raton, Florida, Mr Obama framed the Buffett rule in terms of fairness.
"Right now, the share of our national income flowing to the top 1% has climbed to levels last seen in the 1920s," Mr Obama said. "And yet those same people are also paying taxes at one of the lowest rates in 50 years."
Mr Obama also pitched his larger economic policy as a long-term benefit for the economy, saying investments in areas like education and research were not "made as part of some scheme to redistribute wealth from one group to another".
"They've been made by Democrats and Republicans for generations because they benefit all of us, and lead to strong, durable economic growth," Mr Obama said.
Mr Obama's campaign also used the Buffett-rule proposal on Tuesday to attack Mitt Romney, now the presumptive Republican presidential nominee, effectively confirming that the president is now firmly in general election mode.
"[Mr Romney] thinks millionaires and billionaires should keep paying lower tax rates than middle-class families," the campaign said in a statement. "In fact, Romney himself isn't paying his fair share."
Mr Romney released his taxes in January, showing he paid about 14% of his income for the past two years.
Campaign staff for the former Massachusetts governor themselves criticised Mr Obama's economic policies on Tuesday.
Romney spokeswoman Gail Gitcho said Mr Obama was the "first president in history to openly campaign for re-election on a platform of higher taxes". The proposal would increase taxes on small businesses, she argued.
Mr Romney's closest Republican rival Rick Santorum bowed out of his campaign on Tuesday, cementing the private equity tycoon's status as the man who will challenge Mr Obama in November.
A recent national poll suggests Mr Obama would win a general election against Mr Romney, by 51% to 44%, but Mr Romney was favoured slightly on economic issues.
Mr Obama's speech was part of a full-day trip to the crucial election state of Florida, which also included three fundraising events.
The Buffett-rule proposal is not expected to pass the House of Representatives and Congressional Republicans have dismissed it as a campaign stunt.
"It was designed for no other reason than politics — there is no economic rationale for it," Utah Republican Senator Orrin Hatch said in a statement. "I hope the president will stop the class warfare and start leading by putting out real proposals to bring down our debt."
A congressional committee on taxation estimates such a proposal would generate $46.7bn over 10 years. But Republicans counter that that is simply a tiny fraction of the US national deficit.