The National Post
“The state of our union is getting stronger. And we’ve come too far to turn back now,” he said. “As long as I’m president, I will work with anyone in this chamber to build on this momentum. But I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place.”
Make the rich pay: Obama in State of the Union address
By Sheldon Alberts
WASHINGTON — President Barack Obama appealed Tuesday for an overhaul of the U.S. tax code to force America’s millionaires to pay a bigger share of their income to Uncle Sam, setting the stage for a heated election-year debate about economic inequality that could pit the nation’s middle class against its rich.
In a state of the union address infused with politics and populist rhetoric, Obama said it was time the nation’s wealthiest citizens pay their “fair share” to help lower the U.S.’s mounting debt.
“Now, you can call this class warfare all you want,” Obama told lawmakers gathered for a joint session of the U.S. Senate and House of Representatives.
“But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.”
Obama’s third state of the union address marked an effort by the president to road-test policy themes expected to be at the heart of his bid for a second Oval Office term.
While domestic policy dominated, Obama included a stern warning in his speech for Iran.
“America is determined to prevent Iran from getting a nuclear weapon, and I will take no options off the table to achieve that goal,” he said.
With Americans still battling high unemployment amid a fragile economic recovery, Obama drew battle lines in a fight over taxes.
He renewed his call for an end to Bush-era tax cuts for high-income earners and paired that with an appeal for the renewal of payroll tax cuts set to expire next month.
But he took sharpest aim at the nation’s uber-wealthy, who he said benefit from tax loopholes and shelters that allow them to pay lower rates than most middle class Americans.
“Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep our investments in everything else — like education and medical research; a strong military and care for our veterans?” he said. “Because if we’re serious about paying down our debt, we can’t do both.”
The U.S. president sought to underscore his push for tax reform by inviting the secretary of billionaire investor Warren Buffett to watch the state of the union address with first lady Michelle Obama.
Buffett, the chairman of Berkshire Hathaway, ignited debate over tax rates for “the super rich” by complaining in a New York Times op-ed article last summer that he pays a lower rate — about 17 per cent — than his assistant, Debbie Bosanek.
Obama called for implementation of his so-called “Buffett rule” in the tax code.
“If you make more than $1 million a year, you should not pay less than 30 per cent in taxes,” Obama said.
The focus on raising taxes for the rich carries strong political overtones in the 2012 presidential election — and, in the hours before Obama’s speech, the debate also took centre stage in the Republican presidential race.
Former Massachusetts governor Mitt Romney, whose personal wealth is estimated at $250 million, released financial information showing he earned more than $42 million over the past two years.
Romney paid a 13.9 per cent tax rate in 2010, according to tax filings posted on his campaign website Tuesday morning. He estimated a 15.4 per cent rate for 2011.
Wealthier Americans including Romney and Buffett often make most of their income from investments, which are taxed at lower rates than earned income from a salary.
“We don’t begrudge financial success in this country. We admire it,” Obama said.
“When Americans talk about folks like me paying my fair share of taxes, it’s not because they envy the rich. It’s because they understand that when I get tax breaks I don’t need and the country can’t afford, it either adds to the deficit, or somebody else has to make up the difference . . . That’s not right.”
Republicans shot down Obama’s appeal for a tax code overhaul even before he arrived in the House of Representatives chamber to deliver his speech.
“This is a president who said, ‘I’m not going to be a divider, I’m going to be a uniter,’ and running on the politics of division and envy is — to me it’s almost un-American,” said Rep. John Boehner, the U.S. House Speaker.
As he seeks restore voter confidence in his ability to right America’s listing economic ship, Obama told lawmakers he would focus his efforts on creating jobs through a revitalized manufacturing sector and by exploiting domestic sources of energy.
He called on Congress to support doubling the tax deduction for American manufacturers who build their products in the U.S., adding that tax breaks should be ended for companies that outsource jobs overseas.
On energy, Obama said he was directing his administration to open “more than 75 per cent” of our potential offshore oil and gas resources to development.
Even before Obama spoke, Republican leaders in Congress denounced the president as being hypocritical for advocating greater domestic energy production in his speech.
Just last week, his administration rejected the Keystone XL oilsands pipeline — a $7-billion project that would have carried crude from both Alberta and the Bakken fields of North Dakota to the Gulf Coast of Texas for refining.
“The Keystone pipeline decision made no sense to anyone in the middle of the country that I talk to, and we need to move forward with more American energy,” said Sen. Roy Blunt, a Missouri Republican.
Boehner, meantime, expressed his anger over the Keystone XL decision by inviting four pipeline supporters to be his personal guests at Obama’s speech.
As Obama readies for a difficult re-election campaign, the pace of America’s economic recovery looms large.
The U.S. unemployment rate fell to 8.5 per cent in January with the creation of 200,000 net new jobs. But nearly 24 million Americans are still out of work or underemployed — a statistic Obama’s Republican opponents are set to use as evidence his efforts to jump-start the nation’s recovery have failed.
In his speech, Obama said the U.S. needs to transition from “an economy weakened by outsourcing, bad debt and phoney financial profits.”
The president said he would offer Americans “a blueprint for an economy that’s built to last — an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values.”
He struck a confrontational tone with Republicans in Congress, who are facing their own re-election test on Nov. 6 and are likely to push back against any specific initiatives Obama presents them this year.
“The state of our union is getting stronger. And we’ve come too far to turn back now,” he said. “As long as I’m president, I will work with anyone in this chamber to build on this momentum. But I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place.”
http://news.nationalpost.com/2012/01/24/u-s-needs-to-transition-from-economy-weakened-by-phoney-financial-profits-obama-in-state-of-the-union/
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