WASHINGTON – President Obama plans to propose a new and higher tax rate for people making more than $1 million a year, broadening his call for tax increases as he outlines his plan for long-term deficit reduction.
A senior White House official confirmed to Fox News that the president will seek a new minimum rate for millionaires. The idea is to make sure they pay at least the same percentage as middle-income taxpayers -- Obama will call it the "Buffett Rule," after billionaire Warren Buffett who complained that the wealthy are sometimes effectively taxed at a lower rate than others. That's because investment income is taxed at a lower rate than ordinary income.
Officials have not said how much money the proposal would raise. The president will include the tax proposal as part of his long-term deficit reduction plan Monday. The measure would be in addition to $447 billion in new tax revenue that Obama is seeking to pay for his short-term spending and tax cutting plan to jump start the economy.
Monday's proposals will be aimed at the bipartisan "super committee" tasked with finding about $1.5 trillion in deficit reduction over the next decade. The tax is likely to earn a chilly reception from Republicans. House Speaker John Boehner said Thursday he would oppose tax increases to reduce the deficit, though he has urged for an overhaul of the U.S. tax code.
Boehner said the panel has "only one option, spending cuts and entitlement reforms," a reference to massive federal benefit programs such as Social Security, Medicare and Medicaid.
Obama is expected to push for entitlement reform as well. Any broad compromise that clears the bipartisan committee is almost certain to require Democratic agreement to savings from programs such as the Social Security pension program, along with Republican acquiescence to additional revenues, although any such trade-offs are rarely discussed openly until the last possible moment in negotiations.
The panel has almost unlimited authority to recommend changes in federal spending and taxes and is working against a deadline of Nov. 23.
Obama's new tax proposal was first reported by the New York Times.
The Associated Press contributed to this report.