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Obama seeks tax hike on wealthiest Americans

US President Barack Obama arives to speak in the Rose Garden at the White House in Washington on September 19, 2011.
US President Barack Obama arives to speak in the Rose Garden at the White House in Washington on September 19, 2011.
Nicholas Kamm/AFP/Getty Images

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President Barack Obama outlined new plans for reducing the deficit Monday. Speaking from the White House Rose Garden, he pressed his main proposal. "It's only right we ask everyone to pay their fair share," Obama said.

His $3 trillion package includes raising $1.5 trillion in new revenue through overhauling the tax code. "This is not class warfare," the president said. "It's math."

Obama calls his proposal the "Buffett rule," referring to CEO Warren Buffett's request to pay a higher tax rate than his secretary. The president is asking for his recommendations to be taken up by the congressional supercommittee on deficit reduction.

During the speech Obama said his proposal was straightforward and that it's hard to argue against the fact that millionaires and billionaires should pay more than middle class families.

Republican leaders found plenty to dispute. Sen. Mitch McConnell (R-KY) responded immediately in a written statement saying, "a massive tax hike, phantom savings, and punting on entitlement reform is not a recipe for economic or job growth, or even meaningful deficit reduction." House Speaker John Boehner (R-OH) also responded, adding, "Pitting one group of Americans against another is not leadership."

Obama said the nation's leaders have two clear options. "Either we gut education and medical research or we've got to reform the tax code so that the most profitable corporations have to give up tax loopholes that other companies don't get. We can't afford to do both."

Speaking on KPCC's AirTalk Monday, Tom Del Beccaro, the chairman of the California Republican Party, offered his own alternative to the president's proposal: a flat rate for taxes. The chairman called the current tax code ludicrous and full of loopholes made by lobbyists.

"I would like to scrap the whole thing, have lower flat rates and stop this gamesmanship," Beccaro said. "What I don't want is GM to pay zero taxes because of a complex code."

Congressman Brad Sherman (D-CA) disagreed with the chairman, saying flat rates would effectively raise taxes for the bottom 40-45 percent of wage earners, something Beccaro later rebuffed.

"If there's a class war it's a class war of the Republican party against the middle class," said Sherman, who argued that the middle class has been suffering from tax breaks for the rich for decades. "When you have every Republican signing a pledge that they won't consider tax revenues even as the slightest part of the solution, you create a system where you can't negotiate."

Beccaro held his ground. "If you want to restore growth, and this has been true since the beginning of time, you have to lower the tax burden and you have to lower the regulatory burden."

Despite the heated debate on what's next for the American tax code, the two agreed on one thing: the system is flawed. What the supercommittee will decide, however, remains to be seen.


What do you think of the president's plan? Is he pitting different classes of Americans against each other? He also proposed $580 billion in cuts to benefit programs, nearly half of which would come from Medicare. How would that be executed?


Tom Del Beccaro, Chairman, California Republican Party

Brad Sherman, Democratic Congressman, 27th District (West San Fernando Valley), member of the House Financial Services Committee