Obama Plays Offense

The American president won’t present himself as a ‘lame duck’ before Congress this evening. Before his State of the Union, Obama provoked Republicans with plans for income redistribution. Better opinion polls have given him momentum.

Some of those that Barack Obama will address this evening, as described by representatives and senators, had wanted to remove him from office. As punishment for Obama’s decree after the defeat of his fellow Democrats in the midterm election that prevented more than 4 million illegal immigrants from being deported, Speaker of the House John Boehner shouldn’t simply extend the traditional invitation, an idea put forth in December by a few vocal tea party critics.

But the majority of Republicans want to know nothing of such maneuvers. Since the election victory, mainstream conservatives continuously recall that they did not have daring PR campaign responses to the provocations of the president and, rather, required a response with serious legislation. Of course, Obama didn’t make it easy for the Republicans. Despite the friendly commitment to the bipartisan agreement to which both sides abided following the midterm election in November, confrontation has escalated almost weekly.

On the heels of the long-awaited executive order of the president for immigration reform, the announcement of normalized relations with Cuba before Christmas came out of nowhere and has few, if any, sympathies in the Republican Party. Five veto threats have already come from the White House since the new Congress convened exactly two weeks ago. For example, Obama refuses to tolerate changes to his health care reform, doesn’t want to be forced to approve the Keystone XL pipeline (supported by some Democrats) and resists non-partisan efforts, and doesn’t want to impose new sanctions against Iran during ongoing nuclear talks.

In a closed party meeting last week, Obama promised Democrats that he would continue to “play offense.” Since evidence was necessary to back up the claim, the White House presented new tax plans over the weekend that will likely constitute the core of the State of the Union speech.

The president takes offense to the fact that capital gains are not taxed if the amounts are inherited or, above all, given away. As an example, the White House lets a person who bought $10 million worth of stocks give them to their heirs if they were worth $50 million. Under current law, the value at that time is used as a benchmark for calculation of capital gains — tax free. If the heir later sold the stocks, for example, at a value of $55 million, only $5 million would fall under taxable income; the previous earnings of $40 million would remain tax-free forever.

The government now wants to look beyond a known limit for gifting and inheritance of capital with regard to the realization of profits. They say that it would affect only the richest 1 percent of households; 80 percent of the additional tax burden would be paid by only a few Americans, which would belong to a wealth scale up to the top 0.1 percent. In 2012, the White House calculated that of the 400 taxpayers at the highest personal income bracket, only 17 percent of them, on average, would be taxed at the top income tax rate of 35 percent.

Obama also wants to increase the maximum capital gains tax to 28 percent and introduce a new fee for the largest financial institutions in the country who, according to the government, borrow excessively. With the extra revenue, he wants to make attending community college free for millions of Americans, provide tax relief to double-income families in particular, and set new incentives for retirement savings.

Tax increases of any kind, including tax shelters, remain anathema to Republicans. The White House does not expect that the proposal will soon become law. But Obama is doing his best to get the congressional majority in trouble with his plans almost two years before the presidential election. So the White House knows that the proposed tax plan was last applied under Ronald Reagan — the president who is currently a metric for all things in the ultra-conservative camp. And Obama has deliberately modeled the plan for university grants on a project in the Republican-ruled state of Tennessee, which complicates the criticism of conservatives.

What makes it even harder for Republicans to savor the triumph of their election victory is Obama’s opinion polls. Across the board, pollsters see growing support for the supposed “lame duck” in the White House; in a survey, approximately half of Americans commented that they were satisfied with Obama. Apparently the population is beginning to credit the president with continued economic growth. Large gestures of humility from Barack Obama toward empowered Republicans are not to be expected.

About this publication

Be the first to comment

Leave a Reply