Shadow treasurer Chris Bowen insists the so-called "Buffett rule" is not something Labor will be adopting in its tax policy, even if the Left of his party believes it is a principle that should be debated.
The Buffett rule, named after American businessman Warren Buffett, aims to make high income earners pay a minimum rate of tax.
The Labor Left believes such a policy with a 35 per cent minimum rate, would help counter the rise of populist parties and shore up the country's coffers.
"This is a common sense principle. It deserves public debate," Labor Left national secretary and NSW upper house MP John Graham says.
But Mr Bowen says the Buffett rule was developed for the US tax system and is not appropriate for Australia.
"It will not be a policy that we adopt," he told reporters in Sydney.
"The better way in Australia is to identify the Australian tax concessions which aren't fair, which benefit high income earners disproportionately."
These include negative gearing, capital gains and superannuation tax concessions, changes Labor is already pursuing.
The Labor Left has reportedly asked the party's upcoming national policy forum to consider pursuing the Buffett rule as a priority before a likely debate at the ALP national conference next year.
"Labor and the labour movement have to take serious policy positions that even two years ago would have been outside the political orthodoxy and previously unthinkable," union leader and Labor national executive member Tim Ayres said.
"Without some new policies in response to what is going on people in the suburbs and regions will give up on progressive politics in favour of the far right."
Greens senator Peter Whish-Wilson said if Labor wants to hijack Greens policy for a Buffett tax "that would be great".
"Let's see who can come up with the most progressive taxation platform for the next election. Let's have a revenue-raising arms race," he taunted.
