Sounding a populist tone that will likely be heard on the campaign trail, President Obama today called for higher taxes on the nation’s highest earners as a central part of his new budget proposal.
He also implored Congress to pass extensions of the payroll tax cut and unemployment insurance, just hours before House Republicans offered up a plan that would only accomplish the former goal.
Speaking in the swing state of Virginia, Obama gave a nod, as he has frequently in recent weeks, to Warren Buffett, the billionaire who has noted that he pays a lower income tax rate than some of his employees.
“You've heard me say it: Warren Buffett pays a lower tax rate than his secretary. That's not fair,” Obama told an audience at the Northern Virginia Community College.
His Fiscal Year 2013 budget does in fact urge the observance of the “Buffett Rule,” which stipulates that no household making more than $1 million a year should pay less than 30 percent in income taxes.
But even the president’s top economic advisers acknowledge that the Buffett rule, and other measures that would raise the wealthiest Americans’ tax rates, are only guidelines in this year’s budget, not hard-and-fast requirements.
The lack of specificity on tax rates underscores the notion that this budget, while ill-fated in Congress, is an outline of the president’s re-election priorities, chief among them, more financial sacrifice from the wealthiest Americans.
Gene Sperling,the director of the president’s economic advisory council, told reporters that the Buffett rule “has been one of our principles for individual tax reform as opposed to an explicit provision in this year's budget.”
The budget also hints at, but doesn’t explicitly call for, another new revenue-raising tactic that the president indicated he was open to: restoring the top tax rate on dividends to 39.6% for the highest earners, up from the current maximum of 15%, in place since George W. Bush’s administration.
“In terms of tax reform, no, we have not tried to lay out what the exact rates would be,” Sperling said this afternoon.
That 15 percent tax was recently scrutinized on the campaign trail after Mitt Romney, the millionaire former head of Bain Capital, told reporters he was taxed “closer to the 15 percent rate” because most of his income over the past 10 years has come from investments.
But today White House press secretary Jay Carneyplayed down the notion that the White House’s proposal to raise that rate should be seen as an implicit jab at Romney, the putative Republican frontrunner.
Telling reporters that the president’s re-election team could “preview campaign lines” for them, Carney added that the White House wasn’t “raising revenues for the sake of raising revenues.”
Romney, however, wasn’t Obama’s chief target in his speech today; rather it was Congressional Republicans, whose obstinacy, Obama argued, had led to a short, two-month extension of the payroll tax cut and unemployment insurance that will expire at the end of this month.
“We've been through this before, remember? We've seen this movie,” Obama said. “The time for self-inflicted wounds to our economy has to be over.”
Just hours after his speech, however, House Republicans announced that they would introduce a bill to extend the payroll tax cut for the rest of the year without requiring a spending cut, which had previously been a sticking point for them.
The bill would not, however, include the unemployment insurance extension.
When asked in the briefing whether the president would support the proposal, Carney dismissed it as a “hypothetical proposal.”
“Let's just see how this process plays out,” he said.