The Australian Council of Trade Unions (ACTU) is debating a reform that includes shifting the tax burden of low and middle income earners to millionaires and billionaires.
ACTU said it wants to ensure that mining billionaires like Clive Palmer, Andrew Forrest and others made a minimum tax on their returns, The Age reported.
"The income tax system is absurdly inequitable when it comes to taxing the mega-rich," said Tim Lyons, ACTU's assistant secretary general, as the organisation debates the hot issue at their conference in Sydney next week.
He said tax reforms announced in the federal budget had made the system more progressive, but there was more that could be done to ensure the wealthy pay their fair share.
The ACTU wants the government to adopt an Australian version of Buffett rule that would ensure millionaires who principally derived their income from capital gains paid at least as much in tax as a proportion of their incomes as ordinary working Australians.
With the economic downturn still gripping the world's advanced economies, Australia is the second country to moot a "millionaires' tax" inspired by multi-billionaire Warren Buffett and Obama.
After comments from Buffett that some millionaires paid a smaller percentage of their incomes in taxes than many middle-class families, the Obama administration has proposed the Buffett Rule.
The White House's website describes the rule that no household making more than USD 1 million should pay a smaller share of their income in taxes than middle-class families pay.
"The Buffett Rule would limit the degree to which the best-off can take advantage of loopholes and tax rates that allow them to pay less of their income in taxes than middle-class families."