Obama Aims to Win Election with Tax Hikes on the Rich

In last night’s State of the Union address, U.S. President Barack Obama focused on the theme of “a fair society.” It was time to choose: Will America settle to be a country where growing numbers of people barely get by while fewer and fewer do well, or would it reconstruct an economy in which all receive fair treatment and abide by the same rules? Obama associated the former situation with the Republicans while contrasting the latter as the path sought by the Democrats under his leadership. Anchoring the 2012 State of the Union address on U.S. economic reconstruction, Obama established his confrontational stance against the GOP more distinctly than ever before. The president thus threw his hat in the ring, looking to the end of the year presidential elections that will determine either his reelection or withdrawal from power.

Obama declared his commitment to transforming a currently unjust America that favors the most affluent into a fair and equal society for the middle class. This pledge diverges most drastically with the Republican vision on the issue of tax reform. Obama took aim at Republican primary contender and millionaire Mitt Romney’s 13.9 percent income tax rate, asserting that anyone earning more than 1 million USD a year should be taxed at least 30 percent. The president’s suggestion to introduce the “Buffett Rule” will stir greater aversion among the GOP and rich that have criticized such measures as class warfare. But it is no doubt looked upon favorably by the majority that criticize in turn the polarization between the 1 and 99 percent. Romney’s competitor, Newt Gingrich, will appear all the more neoliberal and be validated as a spokesman of conservative Republican values.

Obama’s strategy to revive the American values of fairness and equality of opportunity also tied into the reconstruction of the country’s hollowed out manufacturing sector. The president denounced tax breaks provided to companies moving factories overseas as he promised to give preferential treatment to businesses that create jobs in the U.S. He also stressed the importance of supporting education and helping Americans develop the skills demanded by labor markets. In the same context, Obama pointed to China, declaring the U.S. would no longer stand by and watch other countries break the rules of competition. The president then announced his plans to establish a special unit that would investigate foreign companies’ unfair business practices, like excessive subsidies or theft of American companies’ intellectual property. This announcement shows that the U.S. is becoming increasingly protectionist and that it is implementing aggressive industry and trade policies. It is thus more likely now that Korea will encounter stronger trade pressures from the U.S. government. Because Obama mentioned increasing the exportation of American cars to Korea through the provisions of the Korea-U.S. Free Trade Agreement, Koreans have no choice but to pay attention to future developments on this issue. The Korean government must prepare thoroughly in this regard. There was also zero mention of North Korea. We are left to wonder if the U.S. has even given a thought to the possibility of changing its policies toward North Korea after Kim Jong Il’s death.