* Obama to propose "Buffett Tax" on millionaires
* Populist gesture designed to appeal to his base
(Updates with more details, background)
By Alister Bull
WASHINGTON, Sept 17 President Barack Obama, in
a populist step designed to appeal to voters, will propose a
"Buffett Tax" on people making more than $1 million a year as
part of his deficit recommendations to Congress on Monday.
Such a proposal, among suggestions to a congressional
supercommittee expected to seek up to $3 trillion in deficit
savings over 10 years, would appeal to his Democratic base
ahead of the 2012 election but likely not raise much in
White House Communications Director Dan Pfeiffer said in a
tweet on Saturday the tax would act as "a kind of AMT"
(Alternative Minimum Tax) aimed at ensuring millionaires pay at
least as much tax as middle-class families.
The "Buffett Tax" refers to billionaire U.S. investor
Warren Buffett, who wrote earlier this year that rich people
like him often pay less in tax than those who work for them due
to loopholes in the tax code, and can afford to pay more.
Obama will lay out his recommendations in White House Rose
Garden remarks at 10.30 a.m. (1430 GMT) on Monday and is
expected to urge steps to raise tax revenue as well as cuts in
But Congress is at liberty to ignore his suggestions and
Republicans, who control the U.S. House of Representatives,
have said that they will not agree to tax hikes.
The supercommittee of six Democratic and six Republican
lawmakers must find at least $1.2 trillion in deficit savings
before the end of the year to avoid painful automatic cuts, and
is mandated to seek savings of up to $1.5 trillion.
Those savings are on top of $917 billion in deficit
reduction agreed to in an August deal to raise the U.S. debt
limit and Obama wants it to go further.
He has separately urged the supercommittee to consider $467
billion in tax increases on top of that goal to pay for a jobs
bill he unveiled earlier this month.
The Buffett Tax could help energize Obama's base by
highlighting a feature of the U.S. tax code that allows the
super rich to pay lower rates of tax than less wealthy
Americans because the bulk of their income is capital gains,
dividends and the 'carried interest' earnings of hedge fund
That is taxed at 15 percent, compared with rates of 10 to
35 percent on straightforward income.
(Reporting by Alister Bull; Editing by Peter Cooney)