Obama calls for increase in tax rates for wealthy Americans

Newly re-elected president Barack Obama has said the wealthy must pay more taxes under any political settlement to avert a looming budget crisis adding that the Congress must act against the so-called fiscal cliff, a package of tax raises and spending cuts due early next year.

However, in a news conference, Republican house speaker John Boehner said tax rises would not be acceptable. According to budget analysts the US would tip into recession unless a deal was struck.

While Obama had made repeated calls for the rich to be taxed more, Republicans remained opposed to the plan.

The fiscal cliff would see the expiry of George W Bush-era tax cuts by end 2012, that would come with automatic, across-the-board reductions to military and domestic spending.

In the East Room of the White House yesterday, the president said, the US could not cuts its way to prosperity and if the US was serious about reducing the deficit, then spending cuts had to be combined with revenue and that meant asking the wealthiest Americans to pay a little more in taxes.

President Obama called on lawmakers yesterday to immediately freeze income tax rates for most Americans while allowing taxes on the wealthy to increase.

In his opening bid to negotiate with Republicans over the nation's ballooning debt, he called on lawmakers to immediately freeze income tax rates for most Americans while allowing taxes on the wealthy to be increased.

In his first public remarks after returning to Washington following his election victory, Obama called senior lawmakers of both parties to the White House next Friday to discuss how to avoid the year-end ''fiscal cliff,'' the automatic series of tax increases and spending cuts that, could plunge the economy into recession, according to experts.