American Millionares to Pay More Tax

September 18, 2011 Taxation in USA

US President Barack ObamaWarren Buffet’s widely debated proposal for a new tax on America’s super-rich might soon be a reality, as President Obama looks for new tax measures to plug the nation’s deficit.

US President Barack Obama has indicated that his administration will soon finalize a proposal for a new tax on the country’s wealthiest taxpayers. The new tax will fall in line with suggestions made by the international investor Warren Buffet, who suggested, a few weeks ago, that America’s richest individuals can afford to pay more taxes.

While talking to journalists on September 17th, the President said that a proposal for the new tax will be included in a series of economic recommendations that will be issued on September 19th to the Joint Select Committee on Deficit Reduction of Congress. The Committee, also known as the Super Committee, was established in August 2011, and is charged with planning deficit reduction measures, to bring an additional USD 3 trillion over the next 10 years to the USA national budget.

The President has chosen not to reveal the details of his proposal yet, but analysts predict that the tax will be almost identical to the one suggested by Warren Buffet last month. The new measure, which is already being called the “Buffet Tax” would charge a 5.4 percent tax on annual cumulative individual incomes above USD 500 thousand or on joint incomes exceeding USD 1 million. Estimates released by the White House show that such a tax could garner up to USD 480 billion in 10 years. If the administration deems the new tax to be inadequate, an even higher rate could be applied in the future to the “super-rich” who earn more than USD 10 million per year.

Barack Obama has hinted at several other tax measures which could be recommended to the Committee, including tax holidays for US companies with profits overseas, lowered tax subsidies for the oil industry, and closing some tax exemptions for high income earners.

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