|Barack Obama has proposed raising taxes on millionaires as part of a budget that the White House said would cut the US deficit by $1.8 trillion (£1.2 trillion) in a decade.
The US President wants those earning more than $1m a year to pay at least 30pc tax on their income, after charity gifts, officials said.
Mr Obama's Budget proposals for the 2014 fiscal year, which will be unveiled in full later on Wednesday, would also enact spending cuts to replace "sequester" reductions put into place last month.
The measures would together bring the US budget deficit down to 2.8pc of GDP by 2016, from 5.3pc this year.
However, the budget proposal stands little chance of being enacted into law because of Republican opposition to tax increases.
White House officials said they hoped it would at least lead to an accord on deficit reduction.
"There continue to be people who are on the Republican side ... in the Senate at least, who are saying things that would give you some hope that there is a path to a deal," a senior administration official told reporters.
In an attempt to reach agreement with Republicans Mr Obama has risked a clash with his own Democrat party by offering up cuts to pensions and healthcare.
He is proposing a less generous measure of inflation to calculate cost-of-living increases for the beneficiaries of many federal programs, with the effect of cutting benefits for most recipients of the Social Security retirement program.
Mr Obama has invited 12 Republicans to dinner at the White House on Wednesday in an effort to soften resistance to his proposals to cut taxes, but experts still see agreement as unlikely.