U.S. Republican leaders Sunday criticized President Barack Obama’s proposal for a new tax on millionaires, calling it “class warfare” and predicting it will face heavy opposition in Congress.
Mr. Obama is expected to propose a “Buffett Tax” on Monday on people making more than $1-million a year as part of his recommendations to a congressional super committee seeking long-term deficit savings.
Paul Ryan, chairman of the House Budget Committee, and Mitch McConnell, Senate Republican leader, said the proposal would limit growth and hurt corporate investment in an already stagnating economy.
“It adds further instability to our system, more uncertainty and it punishes job creation and those people who create jobs,” Mr. Ryan said on Fox News Sunday. “Class warfare may make for good politics but it makes for rotten economics.”
Mr. McConnell said Congress had already debated the issue last year, when Mr. Obama and Republicans hatched a compromise that extended the reduced tax rates, approved during the administration of George W. Bush, for high-earners for two years.
“It’s a bad thing to do in the middle of an economic downturn,” Mr. McConnell said on NBC’s Meet the Press. “There is bipartisan opposition to what the president is recommending already.”
The “Buffett Tax” refers to billionaire U.S. investor Warren Buffett, who wrote last month 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.
Mr. Obama will lay out his recommendations in White House Rose Garden remarks at 10:30 a.m. Monday and is expected to urge steps to raise tax revenue as well as cuts in spending.
The super committee 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 Mr. Obama wants it to go further.
The populist proposal for a millionaire tax would appeal to Mr. Obama’s Democratic base heading into the 2012 election, setting the stage for a battle with Republicans over tax and spending priorities.
U.S. Senator Dick Durbin of Illinois said on CNN’s State of the Union that the proposal to raise taxes would be a good idea as long as it targeted “the wealthy and comfortable and those who wouldn’t even notice it.”