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U.S. President Barack Obama speaks at a luncheon hosted by the Associated Press during the American Society of News Editors convention in Washington on April 3, 2012. (Ron Sachs/Ron Sachs/Via Bloomberg)
U.S. President Barack Obama speaks at a luncheon hosted by the Associated Press during the American Society of News Editors convention in Washington on April 3, 2012. (Ron Sachs/Ron Sachs/Via Bloomberg)

Gearing up for election, Obama calls for higher tax rates for millionaires Add to ...

President Barack Obama is stepping up his election-year insistence that the wealthy pay a greater share of taxes, planning Tuesday to renew his call for Congress to raise taxes on millionaires.

Hoping to draw a sharp contrast with Republican presidential candidate Mitt Romney, Mr. Obama will outline his support for the so-called “Buffett rule” in Boca Raton, Florida. Mr. Obama says he wants to revamp the U.S. tax law under which wealthy investors often pay taxes at a lower rate than middle-class wage earners.

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The push for the Buffett rule is named after billionaire investor Warren Buffett, who famously said it was wrong for him to being paying a lower tax rate than that levied on his secretary.

Mr. Obama's return to the subject is prelude to a Senate vote next week when millions of Americans prepare to file their income tax returns. The plan has little chance of passing Congress, but Senate Democrats say the issue underscores the need for economic fairness.

Mr. Obama's team has made the Buffett rule a key part of its message, saying it shows clear differences with Mr. Romney, who has opposed the plan and withstood criticism from Democrats for paying about 15 per cent in federal taxes for 2011 on income mostly derived from investments. Investment income is taxed at a lower rate than regular income.

“Romney is a beneficiary of a broken tax system, and he wants to keep it that way,” Mr. Obama campaign manager Jim Messina said Monday in a conference call with reporters.

Romney campaign spokeswoman Gail Gitcho said Mr. Obama was the “first president in history to openly campaign for re-election on a platform of higher taxes.” She said the plan would raise taxes on small businesses.

Republicans have noted that Mr. Obama's proposal would collect $47-billion through 2022, a small amount compared with the $7-trillion in federal budget deficits projected during that period.

Rick Santorum, Mr. Romney's top Republican challenger for the party's nomination in late August, returns to campaigning Tuesday after his 3-year-old daughter Bella was released from the hospital. She suffers from a rare genetic condition called Trisomy 18 and was hospitalized Friday as her father began a brief holiday break from campaigning. She was discharged from the hospital Monday night.

Campaign spokesman Hogan Gidley said Mr. Santorum has cancelled his first two events scheduled for Tuesday, but will add a campaign stop in Gettysburg, Pennsylvania, in the afternoon. He will also join James Dobson, the founder of the evangelical Christian group Focus on the Family, for what the campaign called a “conversation on faith, family and American values” in Lancaster, Pennsylvania on Tuesday night.

Mr. Santorum chances of winning the nomination are fading. Five states, including Mr. Santorum's home state of Pennsylvania, hold primaries April 24.

Mr. Romney is far ahead of Mr. Santorum in the race for delegates to the Republican National Convention and is the party's likely nominee. Mr. Santorum has said he won't drop out of the race, though he has acknowledged he will have to win Pennsylvania if his campaign is to survive.

Mr. Romney is spending $2.9 million in TV ads in Pennsylvania. But in deference to Bella's illness, Mr. Romney's campaign pulled down a harsh ad that was running against the former Pennsylvania senator there. Romney spokeswoman Andrea Saul said Monday the campaign asked TV stations over the weekend to pull the ad and replace it with a positive, pro-Romney spot.

Mr. Obama has proposed that people earning at least $1-million annually, whether in salary or investments, should pay at least 30 per cent of their income in taxes. Many wealthy taxpayers earn investment income, which is taxed at 15 per cent, allowing them to pay a smaller percentage of their income in taxes. By contrast, the top rate for taxpayers with high incomes derived from wages is 35 per cent.

The White House said in a report released ahead of Mr. Obama's speech that the tax proposal would restore fairness to the system, pointing to 22,000 households earning more than $1-million annually that paid less than 15 per cent of their income in income taxes in 2009. Nearly 1,500 of those households paid no federal income taxes, the report said.

Obama economic adviser Jason Furman said the Buffett rule reflected the “most simple, common-sense element of any tax reform.”

Mr. Obama was holding three fundraisers near West Palm Beach and Fort Lauderdale. The events were expected to raise at least $1.7-million. A large rally-style event in Hollywood, Fla., was to include a musical performance by singer John Legend.

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