Washington: Barack Obama suggested Ronald Reagan would be sympathetic to a minimum tax on the wealthiest Americans, saying the so-called "Buffett rule" could be renamed the "Reagan rule" in the Republican icon's honour.
Surrounded by a group of millionaires and their secretaries, Mr Obama invoked the late president in support of a measure to prevent millionaires from taking advantage of tax breaks to allow them to pay lower rates than some middle-class Americans.
Administration officials say the push for the Buffett rule is an attempt more broadly to reframe the debate ahead of the November election in a way which forces Republicans to drop their opposition to tax rises in any form.
In his second event in as many days to push for the rule, Mr Obama quoted a speech from 1985 in which Reagan said it was "crazy" that in some cases the wealthiest Americans were paying "nothing" while bus drivers were paying "ten per cent of their salary".
"What Ronald Reagan was calling for then is the same thing that we're calling for now – a return to basic fairness and responsibility, everybody doing their part," said Mr Obama.
"And if it will help convince folks in Congress to make the right choice, we could call it the Reagan Rule instead of the Buffett Rule," he said.
Named after billionaire investor Warren Buffett, who complained of paying a lower tax rate than his assistant, Mr Obama's proposal would set a minimum tax of 30 per cent on millionaires.
Mr Obama's conservative critics say Reagan's stance is being cited out of context, as he backed a tax reform plan that lowered the top tax rate from 50 per cent to 28 per cent in 1986.
Mr Obama by contrast is calling for taxes to increase on the wealthy from their current level of 35 per cent, even on top of the Buffett rule.
The plan is scheduled for a largely symbolic vote next week in the Senate and is likely to be rejected amid staunch Republican opposition. But Mr Obama hopes to use the rule to hammer away at a central theme of his re-election platform – making the wealthiest citizens bear more of the brunt of deficit reduction in the coming years.
Compared to Mr Buffett, one of America's richest people, the guest list of millionaires at Wednesday's ceremony was not particularly high-profile.
The most well-known attendee was arguably Abigail Disney, the granddaughter of the co-founder of the Walt Disney Company – who came with Celine Justice, her assistant at the Daphne Foundation, a philanthropic organisation.
Other millionaires present included Whitney Tilson, an investor, Frank Jernigan, a former Google software engineer, and Lawrence Benenson, a property investor.
By citing Reagan, Mr Obama is trying to depict Republicans opposed to the Buffett rule – including Mitt Romney, his challenger for re-election – as being outside the mainstream of US politics and to the right of where their party has traditionally stood.
A spokeswoman for Mr Romney said: "This latest tax hike scheme is just another example of a president willing to say and do anything to distract from his failed record of chronic unemployment and trillions of dollars in new debt and wasteful spending."
Copyright The Financial Times Limited 2012
Posted on www.ft.com on April 11, 2012 8:09 pm
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