Obama Pushes Tax Reform, Job Training in State of the Union

President Barack Obama called on Congress to raise taxes for the wealthiest Americans in his State of the Union address last night, asking them to embrace a tax plan that would require those making $1 million or more annually to pay at least 30 percent in taxes.

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“You can call this class warfare all you want,” Obama said. “But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.”

The tax plan, named for billionaire Warren Buffett, has little chance of passing given the heightened level of congressional gridlock ahead of the November 2012 elections, but millions of voters heard the president’s message last night, which focused on populist themes from tax fairness to help for homeowners to cracking down on financial crimes.

Obama called on Congress to change the tax code, for individuals and corporations, in the name of fairness. He invoked the teamwork and selfless of the U.S. armed forces to urge lawmakers to eliminate loopholes and shelters in the tax code that allow a quarter of all millionaires to pay lower tax rates than millions of middle-class households.

Obama will take his case to voters today as he begins a three-day trip to election battleground states to talk about his initiatives on manufacturing, energy, and education. He will draw contrasts between himself and the Republican presidential candidates while saying he “will work with anyone in his chamber” to accelerate the economic recovery.

“I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place,” Obama said in his speech last night.

Tax fairness has become a major election-year issue, and Obama’s stance contrasts sharply with that of his opponents. Republican front-runner Mitt Romney yesterday released his tax returns, which showed that he paid 13.9 percent in taxes on $21.6 million earned in 2010. More than half of his income came from capital gains and dividends, which are taxed at a top rate of 15 percent, rather than the 35 percent top rate for ordinary income.

Obama also proposed ending tax breaks for companies that move their operations overseas, while offering tax credits for companies that close operations abroad and bring jobs back home.

“Every multinational company should have to pay a basic minimum tax,” Obama said. “And every penny should go towards lowering taxes for companies that choose to stay here and hire here in America.”

He also talked about education and job training in order to make American workers more competitive globally and held reduce unemployment. Obama proposed a partnership with community colleges and businesses to train and place 2 million workers.

The president also promoted U.S. energy independence, directing the government to promote development of natural gas, which he said will support more than 600,000 jobs by the end of the decade.

While Obama offered policies to appease Democrats as well as some that even Republicans could get behind, whether he will be able to move forward with any of his proposals before the election is likely to have an impact on the results. Republican opposition in Congress will try to quash Obama’s proposed legislation, as any victory for the president would give him a leg up come November.

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To contact the reporter on this story: Emily Knapp at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com