MercoPress. South Atlantic News Agency

Obama to propose a “Buffett Tax” on people making over a million dollars

The presidential initiative seeks to cut the deficit but it’s not sure if Republicans will support it

US President Barack Obama, will propose a 'Buffett Tax' on people making more than US$1 million a year as part of his deficit recommendations to Congress on Monday.

Such a proposal, among suggestions to a congressional super committee expected to seek up to US$3 trillion in deficit savings over 10 years, would appeal to his Democratic base ahead of the 2012 election but may not raise much in revenues.

White House Communications Director Dan Pfeiffer said in a tweet on Saturday the tax would act as “a kind of AMT” (Alternative Minimum Tax) aimed at ensuring millionaires pay a minimum rate of tax that at least matches that of middle-class families.

The “Buffett Tax” refers to billionaire US investor Warren Buffett, who wrote earlier this year that rich people like him often pay less in tax than those who work for them due to loopholes in the tax code, and can afford to pay more.

Obama will lay out his recommendations in White House Rose Garden remarks at 10.30 a.m. EDT on Monday and is expected to urge steps to raise tax revenue as well as cuts in government spending.

Those could include reforms of the Medicare and Medicaid government healthcare programs for elderly and poorer Americans. The White House has already said Obama will not recommend any changes to the popular Social Security federal retirement plan.

Obama, who has been hammered in opinion polls over his handling of the faltering economy, wants to use his plan to counter Republican claims he is a 'tax-and-spend' liberal as he campaigns for re-election next year.

Congress is at liberty to ignore his suggestions and Republicans, who control the US House of Representatives, have said that they will not agree to tax hikes.