Obama is proposing a new tax as part of a proposal to cut $1.5 trillion from the long-term deficit. From a libertarian standpoint, there are a lot of points that need to be cleared up about this subject.
First, most of the politicians and mainstream media pundits, and even most Americans, start with the wrong assumption. They assume that it is morally acceptable to take people's money with the threat of force, as long as it is done through the government. This is the sham that is democracy. As Gary North says, "thou shalt not steal, except by majority rule".
Second, why is this being called a millionaire's tax? It is not a tax on wealth. It is a tax on income. If someone makes a million dollars in one year, he is not necessarily a millionaire. First, he has to pay all of the taxes that already exist. Then he has to spend at least part of this money on sustaining his life and lifestyle. If someone is working in a sales job and has one big year or if someone happens to win the lottery or if someone happens to have one extremely valuable asset that is sold, then these people might have one big year with a high income, but it doesn't necessarily make them rich.
Third, one thing that some Republicans and supply-siders get right is the Laffer Curve, named after Art Laffer. It basically says that at some point, if you keep raising taxes, that it will actually lead to less tax collections by the government. This is the same as all socialist and big government policies. More taxes lead to a worse economy (relatively speaking) and to less incentive to work, especially when the marginal tax rates get really high. So even if Obama were to get his proposal passed (which it won't), it might not even cut the future deficits by one dollar.
Fourth, as Laurence Vance recently pointed out, Obama's proposal is supposed to cut $1.5 trillion over ten years, which is equal to $150 billion per year. Obama could just end the wars and bring the troops home and this would cut the deficit by that amount without having to raise taxes.
Democrats want to play class warfare and tax the rich (more accurately, high income). Many Republicans actually want to tax the poor because almost half of Americans pay no federal income tax. I am in agreement with Ron Paul that we are almost halfway there. We should not want to tax the rich or poor more. We should want to reduce taxes for everyone. Even poor people pay many taxes. Inflation is probably the worst thing that hurts the poor.
The only way to solve the economic mess we are in is to get the government out of our lives. Taxes should be reduced drastically and government spending should be reduced even more drastically. Regulations should be reduced drastically, instead of continually adding them. We need to end the empire. We need to end federal involvement in education, healthcare, energy, and every other aspect of our lives. We need to end the federal monopoly on money. We need for Americans to stop relying on government and to stop seeking government to solve our problems. As Reagan said, "government is not the solution; it is the problem".
Obama's so-called millionaire tax will not pass. If it did, it would only make things worse. He does not understand economics at all. He is also a demagogue. If he wins re-election, it is only because the Republican nominee is just as bad.