President Barack Obama’s seventh State of the Union address promises to include a number of economic proposals that will address income inequality and the rising costs of education. However, with the Republican Party in control of Congress, there is little chance his initiatives will pass. It would appear that the president is now trying to frame the debate for the fast approaching 2016 presidential election.
The president has already announced some of the points he will discuss in his address. They include his plans to raise taxes on the rich. This proposal has three parts: to change the rules of the capital-gains tax so that assets can be taxed even as they are passed on through inheritance; to increase the tax rate on capital gains and dividends to 28 percent; and to tax financial firms that hold over $50 billion in assets 0.07 percent.
Other proposals include free community college tuition, extending paid leave for federal workers, and increased middle-class tax breaks.
Even if these measures will not pass, Mr. Obama is sending a clear signal aiming to divide those who are working for the poor and those who are working against them. The message is not going unheard. Potential Republican candidates are scrambling over one another in order to declare their allegiance to the middle-class. Even Mitt Romney, the famous 47 percenter, has a three-point agenda to lift people out of poverty.
“Inequality – and especially the growing opportunity gap – have become the top litmus test of seriousness for 2016,” said Robert Putnam, a Harvard political scientist who has discussed inequality issues with the president and his advisers. “The entry ticket for the presidential sweepstakes is that you have a policy — some policy — for dealing with this issue.”
Mr. Obama’s efforts to shift the focus to income inequality and education reflect a broader shift in economic focus that moves away from the doom and gloom of the recession and towards America’s current economic recovery.
“Over the last six years, we have been weighed down by the legacy of the worst financial crisis since the Great Depression” said President Obama in a video previewing his State of the Union address. “Now that we have fought our way through the crisis, how do we make sure that everybody in this country, how do we make sure that they’re sharing in this growing economy?”
Unemployment is at record lows, as are gasoline prices. The stock markets are up and so is the economic growth rate. One can honestly say that Mr. Obama has guided this country out of the recession. So it is only fitting that the question for 2016 is “What next?”
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