President Barack Obama on Monday announced a plan to reduce the deficit by more than $3 trillion over the next 10 years, with $1.5 billion coming from new taxes on the wealthy.
According to a New York Times report, administration officials said that the plan relied on entitlement program cuts, war savings, and increased taxes on the wealthy—termed the Buffett Rule after billionaire Warren Buffett’s complaint that he is taxed at a lower rate than his employees. The tax hike includes a new minimum rate for those who earn more than $1 million per year, and also closes some loopholes and limits the amount that those with high earnings can deduct.
Obama also specifically promised to veto any plan that relies solely on spending cuts to reduce the deficit and fails to include revenue increases through higher taxes on the wealthy. John Boehner, R-Ohio, House speaker, reiterated just last week that his party would not support any tax increases to raise revenue and, according to Bloomberg, instead urged cuts to such programs as Medicare.
Republicans predictably attacked the plan on Sunday, with Rep. Paul Ryan, R-Wisc., calling it “class warfare” and Sen. Mitch McConnell, R-Ky., saying it was “a bad thing to do in the middle of an economic downturn.”
Progressives, on the other hand, supported the Buffett Rule. In a statement, Roger Hickey, co-director of the Campaign for America’s Future, a progressive center, said, “The report that the president is planning to ask millionaires and billionaires to pay taxes at a higher rate than their secretaries pay is welcome news that will be wildly popular with voters.” Indeed, a CBS News report in mid-August showed that in 23 different polls, voters preferred taxes to be raised on the wealthy as a means to reduce the deficit.