State of the Union: Obama to double down on taxing the rich
The State of the Union will be an opportunity for President Obama to press his plan to tax the rich more, which could become a major issue in the 2012 campaign.
In his State of the Union address Tuesday night, President Obama is expected to appeal for higher taxes on wealthy Americans – a theme that is both familiar and sharply at odds with his Republican rivals for the White House.Skip to next paragraph
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It is an issue that could play a central role in the debates leading up to the 2012 election, partly because tax policy – particularly for the rich – is one of the clearest economic-policy divides between Mr. Obama and Republicans.
Moreover, tax policy lies at the intersection of three issues voters care deeply about:
- How best to generate economic growth.
- What to do about huge federal deficits.
- Why living standards have been stagnating for the middle class while rising for the wealthy.
The president's pitch is, in essence, that the goals of job growth and asking the rich to pay their "fair share" can be achieved side by side.
Republicans counter that higher taxes are a recipe for slower economic growth, and for that reason Obama's plan would backfire in its goal of aiding middle-class Americans. Where Obama calls for taxing the rich more, GOP candidates have rolled out plans that would further reduce taxes on high-end earners.
This debate isn't new, but it is moving toward the election-year forefront as Obama uses his annual address to a joint session of Congress as a forum to lay out the vision for his reelection campaign.
Obama's speech coincides with Republican challenger Mitt Romney releasing his income-tax returns, which showed that the millionaire former businessman is taxed at a rate below 15 percent because much of his income comes from investments, not salary. That's lower than the rate paid by many families who consider themselves middle class.
"It’s wrong for Warren Buffett’s secretary to pay a higher tax rate than Warren Buffett," Obama said in a December speech in Osawatomie, Kan. "And by the way, Warren Buffett agrees with me. So do most Americans – Democrats, independents, and Republicans. And I know that many of our wealthiest citizens would agree to contribute a little more if it meant reducing the deficit and strengthening the economy that made their success possible."
Here's a hint that Americans who tune in Tuesday night will hear something like that again: The long-time secretary of Mr. Buffett, the Nebraska investor and billionaire, is scheduled to be a guest at the State of the Union address.