Obama says the rich 'really don't need a tax cut

President Barack Obama argued Thursday that Republicans should abandon their proposal to eliminate the estate tax on large inheritances, because wealthy people already have enough money and don't need another tax cut.

"These folks at the very top, the top one-tenth of one percent, are wonderful people," Obama said at a speech before a community college in Birmingham, Alabama. "Warren Buffett's a great friend of mine. They've done amazing things, they've invested, they've created businesses. They deserve great success."

President Barack Obama spoke in Alabama Thursday and said the rich 'really don't need a tax cut,' a comment that referred to GOP plans to eliminate the estate tax. Image: AP Photo/Jacquelyn Martin

"But they really don't need a tax cut," he said to applause. "And if you talk them, they'll tell you, 'I already got a couple planes, I already got a boat, I already got ... five or six houses, I'm OK.' "

Obama didn't cite the estate tax by name, but his comments clearly referred to a House GOP plan to eliminate that tax. The House Ways & Means Committee approved a bill on Wednesday to end the estate tax on inheritances of $11 million and up, a plan that the White House has criticized because it would only affect the top 0.1 percent of taxpayers in the country.

Republicans argue it's time for the "death tax" to go, because the tax hits inheritances that people have worked all their lives to build up, and that they are trying to pass on to their family.

"People work hard and pay taxes all their lives," Ways & Means Committee Chairman Paul Ryan (R-Wis.) said this week. "They've earned the right to leave something for their kids — often a family business — without being penalized for it."

Obama said that plan, as well as the GOP budget plan that would reduce the rate of growth for various government programs, represent the "opposite of middle class economics." Instead, he said the federal budget and tax policy should be used to give more to lower-income people who are working.

"Our top priority should be helping everybody who works hard get ahead," he said. "It doesn't mean everybody's going to be equal. It doesn't mean that we're going to punish people who've started businesses and taken risks. They should be rewarded."

Obama has been criticized by Republicans for favoring these sort of wealth redistribution policies. But later in his own speech, Obama indicated that he supports the concept of rugged individualism.

"We are a country of rugged individuals," he said. "We don't expect folks to give us a handout. We expect people to work hard, we expect that hard work to be rewarded." He then added an important caveat.

"But, we're also our brother's keeper, we're also our sister's keeper, we're also a country that was built on the idea that everybody gets a fair shot, and that we put laws in place to make sure that folks aren't taken advantage of," he said.