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Today's Top News
Republicans Cry 'Class Warfare' Over Millionaire Tax
Leading Republicans on Sunday spurned as "class warfare" an administration proposal dubbed "the Buffet rule" that would ensure millionaires are taxed at the same rate as the middle class.
President Barack Obama was expected to make the proposal on Monday, picking up on a repeated complaint by billionaire investor Warren Buffett that he pays taxes at a lower rate than his secretary, White House officials said.
"If he's feeling guilty about it, I think he should send in a check," Senate Majority Leader Mitch McConnell of Buffet on NBC's "Meet the Press." "But we don't want to stagnate this economy by raising taxes."
Senator Lindsey Graham, a Republican from South Carolina, dismissed "the Buffet rule" as "just a political move by the president."
Increasing taxes on millionaires would add "a de minimis amount of money to the Treasury to pay off the debt," he said on CNN's "State of the Union" talk show.
"Tax code should be reformed for one purpose -- generate jobs. When you say we'll tax one percent of the economy, that's class warfare," said Graham, who called for reforms that would eliminate deductions and flatten income tax rates overall.
Echoing Graham, Representative Paul Ryan, a Republican from Wisconsin, said the administration's proposal was "going in the wrong direction."
"Class warfare... may make for really good politics but it makes a rotten economics," he said on "Fox News Sunday." "We don't need a system that seeks to divide people. We don't need a system that seeks to prey on people's fear, envy and anxiety."
Some millionaires get a big break because investment gains -- such as capital gains, dividends and "carried interest" compensation paid to investment managers and hedge fund partners -- are taxed at a lower rate than wages.
They also only pay the Social Security payroll tax on the first $106,800 of their income, the cut-off point for the tax.
Buffet, one of the world's richest men, has questioned the fairness of the system and suggested that the rich should be willing to pay more.
Obama will unveil the tax hike as part of a broader announcement at the White House on a long-term deficit reduction proposal.
He will not indicate a specific rate or provide other details such as how much revenue the plan would raise, according to The New York Times, which first reported the story.
A special joint congressional committee is working on a bipartisan budget deal due by late November amid a new row between Obama and Republican lawmakers over the president's jobs bill, after Obama said he would finance the plan by ending tax breaks for oil and gas firms and individuals earning over $200,000.
Republicans rejected the blueprint this week.
The millionaires' rate would affect just 0.3 percent of taxpayers, or fewer than 450,000 of the some 144 million returns filed for 2010, according to the Times.