Obama to raise taxes on US millionaires

President Barack Obama on Monday will call for a higher minimum tax rate on millionaires to ensure they pay the same rate on their earnings as middle-income taxpayers, according to a White House official. The plan comes as Obama engages in a months-long, countrywide trek to back his $447 billion jobs bill to reduce 9.1 percent unemployment and restore trust in his economic leadership. The tax raise is unlikely to pass Congress as Republicans have already rejected Obama's plans to raise taxes and limit deductions for the highest earners, and would see the rule as a political gambit. Republicans say adding to the tax burden will hit small business owners and therefore harm job creation. An administration official said on condition of anonymity that Obama would call his millionaires plan the "Buffett Rule," a reference to an objection by billionaire investor Warren E. Buffett that the richest Americans generally pay a smaller share of their income in federal taxes than middle-income workers. Some millionaires enjoy the lower rate 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. But Obama 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. He will unveil the tax hike as part of a broader announcement at the White House on a long-term deficit reduction proposal. 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 as 144 million returns were filed for 2010, according to the Times.