Obama calls for "Buffett tax" on wealthy

US president Barack Obama said the wealthy and corporations should pay their "fair share" to cut the country's deficit.

Outlining his plans to reduce the US deficit and kick-start economic growth, Obama proposed cuts to healthcare benefits but said businesses and the wealthy must pay higher taxes too.

This is part of his plan to save more than $3tn (£1.9tn) over a decade to pay for his plan to boost jobs, with roughly half coming from tax increases, the BBC reports.

In a televised address from the White House, Obama said if the US did not act now, the burden of debt would fall on future generations.

"Washington has to live within its means," he said. "We have to cut what we can't afford, to pay for what really matters."

Among the plans are proposals to cut some $250bn of spending on Medicare - the healthcare programme for the elderly.

But Obama added he would veto any bill eventually passed by Congress that cut healthcare but did not include new taxes on the rich.

"Middle-class families shouldn't pay higher taxes than millionaires and billionaires," he said. "It's hard to argue against that."

Obama suggested a "Buffett rule", which would see Americans who earn more than $1m pay the same rate of tax as those who earn less.

Billionaire financier Warren Buffett had previously complained that he and his wealthy peers pay relatively less tax than their employees.

Many high-income Americans benefit from tax loopholes that see earnings on investment taxed at lower rates than wages.

Obama's latest plans will go before a super-committee of lawmakers.