Obama pitches tax on rich

Picking an election-year fight with Republicans, President Barack Obama is urging Congress to boost taxes on millionaires, traveling to Florida to make a populist pitch on an issue that draws a sharp contrast with GOP presidential candidate Mitt Romney.

Obama is outlining his support for the so-called "Buffett rule" in Boca Raton, Fla., arguing that wealthy investors should not pay taxes at a lower rate than middle-class wage earners.

The push for the Buffett rule, named after billionaire investor Warren Buffett, comes ahead of a Senate vote next week and as millions of Americans prepare to file their income tax returns. The plan has little chance of passing Congress, but Senate Democrats say the issue underscores the need for economic fairness.

Populist issue

Obama's team has made the Buffett rule a key part of its message, saying it shows clear differences with Romney, who has opposed the plan and withstood criticism from Democrats for paying about 15 per cent in federal taxes for 2011 on income mostly derived from investments.

"Romney is a beneficiary of a broken tax system, and he wants to keep it that way," Obama campaign manager Jim Messina said Monday in a conference call with reporters.

Romney campaign spokeswoman Gail Gitcho said Obama was the "first president in history to openly campaign for re-election on a platform of higher taxes." She said the plan would raise taxes on small businesses.

Republicans have noted that Obama's proposal would collect $47 billion through 2022, a small amount compared with the $7 trillion in federal budget deficits projected during that period.

'Romney is a beneficiary of a broken tax system, and he wants to keep it that way' —Obama campaign manager Jim Messina

Obama has proposed that people earning at least $1 million annually, whether in salary or investments, should pay at least 30 percent of their income in taxes. Many wealthy taxpayers earn investment income, which is taxed at 15 percent, allowing them to pay a smaller percentage of their income in taxes. By contrast, the top rate for taxpayers with high incomes derived from wages is 35 percent.

The White House said in a report released ahead of Obama's speech that the tax proposal would restore fairness to the system, pointing to 22,000 households earning more than $1 million annually that paid less than 15 per cent of their income in income taxes in 2009. Nearly 1,500 of those households paid no federal income taxes, the report said.

Obama economic adviser Jason Furman said the Buffett rule reflected the "most simple, common-sense element of any tax reform."

Obama was holding three fundraisers near West Palm Beach and Fort Lauderdale. The events were expected to raise at least $1.7 million. A large rally-style event in Hollywood, Fla., was to include a musical performance by singer John Legend.