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Obama: Millionaires should pay at least 30 percent in taxes

 

People earning over $1 million per year should pay an effective tax rate of no less than 30 percent, President Obama said in his State of the Union address Tuesday night.

The president laid down one of his most political markers of the annual policy speech by crafting what he called the "Buffett Rule," named after the famous billionaire investor.

The president calls for lower taxes on lower-income wage earners but asks for wealthier taxpayers to pay more.

"Tax reform should follow the Buffett rule:  If you make more than $1 million a year, you should not pay less than 30 percent in taxes," Obama said.

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The president also said that Americans earning over $250,000 per year should also no longer be able to claim special tax breaks or deductions; he said households earning under $250,000 shouldn't face a tax increase.

"You can call this class warfare all you want," Obama said. "But asking a billionaire to pay at least as much as his secretary in taxes?  Most Americans would call that common sense."

Obama's pronouncement comes at a point of contrast, when the Democratic National Committee and the president's re-election campaign have assailed former Massachusetts Gov. Mitt Romney, one of the prime candidates for the GOP presidential nomination, for his tax burden.

Romney released his tax returns Tuesday at the behest of his Republican primary opponents. Those tax records found that Romney, whose net worth is estimated between $190 and $250 million, paid about 14 percent of his income in taxes. That's because his income came primarily through investments, which are taxed at a lower rate.

The president calls opportunity for all the "defining issue of our time" in his State of the Union Address.

Obama's plan would raise taxes on millionaires like Romney and essentially treat their investment income like any other income. The new Buffett Rule falls cuts to the core of the prime focus on the issue of fairness, which colored Obama's address Tuesday evening.

The president also pressed lawmakers to pass an extension of the payroll tax cut through the end of this calendar year. Congress extended the expiring tax cut in late 2011 in a last-minute deal.