Obama looks to raise cash from the rich

 
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US President Barack Obama is expected to unveil plans for a new tax on millionaires today – but political rivals are already calling the proposal “class warfare”.

Obama is preparing to set out an extra levy on those earning more than $1m a year, dubbed the Buffett Tax following billionaire investor Warren Buffett’s recent call for the government to tax the richest Americans more.

The President will propose the new charge to a congressional super committee that is looking at ways to trim the United States’ eye-watering deficit, which in July passed a $14.3 trillion ceiling set by Congress.

The committee has been tasked with finding at least $1.2 trillion in deficit savings before the end of the year to avoid painful automatic cuts, and is mandated to seek savings of up to $1.5 trillion.

Paul Ryan, chairman of the House of Representatives budget committee, and Mitch McConnell, Senate Republican leader, said the proposal would limit growth and hurt corporate investment in an already stagnating economy.

“It adds further instability to our system, more uncertainty and it punishes job creation and those people who create jobs,” Ryan told Fox News Sunday. “Class warfare may make for good politics but it makes for rotten economics.”

McConnell said the move would “throw a wet towel over the private sector economy”.

The proposal is expected to face heavy opposition in Congress, and some Republicans said yesterday the move appeared to be an attempt to curry favour with the Democrat faithful ahead of the 2012 elections rather than a serious legislative proposal.

“I just think that’s a political move by the president,” South Carolina senator Lindsey Graham said of the tax. “When you pick one area of the economy and you say, ‘We’re going to tax those people because most people are not those people,’ that’s class warfare,” he said, repeating the most prominent Republican complaint about the plan.