State of the Union 2015: Will there be any surprises

20 Jan 2015 | Author: | No comments yet »

5 things about Barack Obama’s Robin Hood tax plan.

This column is part of “The State of America,” an series leading up to President Barack Obama’s 2015 State of the Union Address on Tuesday, Jan. 20. The Robin Hood-style proposal would raise taxes on capital gains and close various breaks for the wealthy in order to finance more generous education, family and retirement benefits for those further down the income ladder. “By ensuring those at the top pay their fair share in taxes, the president’s plan responsibly pays for investments we need to help middle-class families,” the administration says in a summary. It faces long odds in the Republican-controlled Congress, where lawmakers have bitterly complained about a string of recent tax increases on the wealthy. He’ll also make demands to act ‘reasonable’ over issues that he disagrees with, such as the Keystone pipeline. “Of course, Obama is likely to provide a laundry list of standard policy initiatives over everything from cutting methane emissions, education funding to space exploration.

CAPITAL GAINS: The administration wants to increase the top rate to 28 percent, from the current rate of about 25 percent with various surcharges, while expanding the number of things that would be subject to it. It would do that by cracking down on what’s known as a “stepped-up basis.” Here’s how it works: If you sell stock for $1 million that you bought for $100,000, you pay capital gains taxes on the $900,000 profit.

In 2014, the fossil fuel divestment movement kept spreading like wildfire, with more cities, religious groups, and universities signing up to the cause. Watching him speak to a packed Congress was like watching Barbra Streisand sing, Michael Jackson moonwalk, Tiger Woods golf, or Steve Jobs pitch a product. According to the Congressional Budget Office, it cost the Treasury about $50 billion in 2013, and 21 percent of the tax benefits went to the top 1 percent. However, there is also an 800-pound gorilla in the room: what people think of the president at the time — call it the mojo factor. “President Obama’s recent actions on immigration and Cuba bespeak a new boldness, that of a man who never has to busy himself with electioneering ever again, if he so chooses.

The administration’s plan would end the stepped-up basis “loophole,” though it would add various provisions aimed at shielding the nonwealthy and small businesses from having to pay the tax. I suspect we’ll find out whether he still wants to drive a grand bargain with congressional Republicans on Social Security or whether, emboldened by the progressive wing of his party, he’ll push back.

In this and other matters, I expect to see Obama Unbound.” “The White House has taken a new approach already, with a policy rollout run-up instead of coming out of the speech. I think that leads down the path to the impossible dream of most SOTU speechwriters — a shorter, more thematic speech, and that, given the innovations the White House continues to make in their communications shop, farther down the path toward the SOTU digital experience of the future!

He’ll work to frame the next year with his usual construct: ‘I’ll work with anyone, from either party, as long as they give me exactly what I want without compromise or modification.’ He’ll declare the economy is awesome, take full credit for gas prices going down, talk tough on ISIS/AQAP, touch on the Ferguson issue in an attempt to blame it on the GOP and propose trillions in new spending on soft, focus-group-friendly giveaways and boondoggles. The administration notes that a 28 percent rate would match the levy under President Ronald Reagan, though the top income tax back then was 28 percent, while income taxes currently top out at 39.6 percent, not including various surcharges. Both position paper and performance piece, the Address must pitch policies in proportion while showcasing the president in a way that entrances 535 Members of Congress in person and millions watching it at home. The administration’s Clean Power Plan aims to cut carbon dioxide emissions from power plants by 40%, spelling the end of the dirty coal industry as we know it.

Almost all of it will slip into obscurity and slow political death. “He knows very well that his laundry lists of ‘free’ goodies are already dead on arrival, but he’ll make the point anyway, trying to capture a day or two of ‘Good Obama/Bad Republican’ press. That’s because illegal immigrants can currently claim a separate child tax credit while, under Obama’s immigration initiative, they might be able to claim the EITC as well.

Both are refundable, which means if the credits exceed a taxpayer’s tax bill, the person can receive a check from the government for the difference. Expect a chilly reception from the GOP.” “I think the biggest possible surprise would be a carbon tax — he might say that energy will never be lower so now is the time to place a carbon tax with the proceeds going to Social Security and take advantage of the windfall for the good of all. After Clinton so carefully crafted a role as America’s “Good Father” in 1996, Special Prosecutor Kenneth Starr was now investigating Clinton’s weaknesses as a bad husband. Our voluntary target of reducing CO2 emissions 27% below 2005 levels by 2025 isn’t nearly enough to put us on a safe pathway to keeping global warming below 2°C, above which scientists say we risk utter catastrophe.

Obama also wants to fix an issue in which those who join a government program that forgives student loan debt after borrowers make payments for 20 years can be socked with unexpected — and big — tax bills. Across the country, millions of people, especially in low-income communities, are living with the daily injustices that come from a pollution based economy: high asthma rates, a lack of quality infrastructure, manifold threats to drinking water or other critical natural resources. At the same time, the administration would expand tax breaks for small businesses that automatically enroll their employees in retirement savings accounts.

Other renewable technologies are just as promising: there were days last November when 100% of Norway’s electricity consumption was provided by the wind. He’s pledged to quit smoking, and then sucked down an entire pack on the sly. “All of the above,” may make for a good soundbite, but it’s not going to solve global warming. Let’s give them a hand.” As the Democrats applauded the squirming Republicans, he beamed: “That’s great.” With that mischievous maneuver, Clinton spoke over the Republicans’ heads directly to the American people, emphasizing the bipartisanship most Americans want but both parties frequently fail to provide. While again calling for “a government that is a progressive instrument of the common good, rooted in our oldest values of opportunity, responsibility and community,” Clinton tried mobilizing support for Social Security reform. A study published in Nature concluded that over 90% of Australian and U.S. coal, and nearly all of the Canadian tar sands, would have to remain unburned.

Bush marveled, “Now I understand why he’s inside looking out, and I’m outside looking in.” Since his first inaugural address, Obama has failed to wow Americans with his speeches, as he did so effectively during his 2008 campaign. He can direct the Environmental Protection Agency to strengthen their regulations on fracking, mountaintop removal coal mining, and other dangerous fossil fuel extraction.

And he can certainly say no to efforts by climate deniers in Congress to roll back the environmental initiatives the administration has already put into place. With unemployment down but GDP up, Obama finally can deliver some of the good news his predecessor was lucky enough to sprinkle throughout his speeches. Obama can flummox Republicans and appeal to the public by seizing the center rather than lurching left, acting as president of all the people, not a partisan leader of the opposition-to-the-opposition.

He might even integrate it all into a coherent, comprehensible, and accessible vision such as Clinton’s opportunity-responsibility-community mantra, so Americans have a sense of forward momentum. But Clinton also conveyed an intense, authentic, infectious love of the people, the policies, and the politics that disarmed many Republicans, thrilled many Democrats, and wooed many independents.

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