Your Cheat Sheet to Obama’s State of the Union
In his State of the Union address last night, President Barack Obama outlines a number of policy proposals for the coming year, many of which were aimed at a predominantly partisan Congress who appears very unlikely to give them serious consideration (given that this is a Presidential election year).
Most provocative among his proposed policies was the creation of a “Buffett Rule,” named after Berkshire Hathaway’s CEO Warren Buffett, who last year publicly supported an increased tax burden for the wealthy by emphasizing that he payed a lower income tax percentage than his secretary. To call further attention to this, Mr. Buffett’s actual secretary, Debbie Bosanek, was seated near Michelle Obama in the gallery for the State of the Union address.
Under the proposed “Buffett Rule,” households that earn more than $1 million per year will pay a minimum 30% federal income tax rate, and would be barred from making deductions on health care, child care, retirement,and mortgage interest. Tax breaks on charitable contributions would not be restricted. The President later also called for a ban on farm subsidies for millionaires.
For actual businesses, as a means of encouraging domestic growth and discouraging outsourcing to foreign countries, Mr. Obama proposed a law that would bar companies from deducting expenses that directly pertain to the costs of exporting existing American jobs overseas. Conversely, he also proposed creating a new tax credit to cover any moving expenses for companies that return overseas jobs back to the United States.
President Obama also proposed that any U.S. companies with foreign operations should pay a minimum tax on their overseas profits. Specifically, the companies would pay the difference between the foreign tax and the new, still undetermined minimum tax rate. The President did endorse, however, a reduced tax rate for manufacturers, especially those who pursue high-tech manufacturing, development, and promote job training.
In regards to infrastructure, the President proposed spending $200 billion, culled from the gradual wind-down of the wars in Iraq and Afghanistan, on the building and repair of roads and bridges.
On the subject of escalating college tuition and student loan debt, Mr. Obama proposed reducing federal aid to colleges and universities who set tuition rates “too high.” He also expressed a desire to double the current amount of work study jobs. Though not directed at Congress, the President called upon all states to implement laws that prohibit students from dropping out of high school before the age of 18.
In a move aimed toward home owners who have been unfairly burdened by declining home values in the face of the subprime loan crisis and the bursting of the housing bubble, the President encouraged funding that would help people who have kept up with their mortgage payments to refinance them at the new, lowered interest rates.
Addressing many Americans’ concerns about the corrosive influence of money in politics, President Obama also called on legislation that would ban insider trading by members of Congress and prevent lobbyists from bundling campaign donations with lobbying expenses. He also called on the Senate to give Presidential nominees an up-or-down vote within 90 days.
In executive actions Mr. Obama proposed that he would undertake himself, the President proposed a brand new trade enforcement unit that would investigate unfair trade practices in regards to foreign business, specifically mentioning China. He also tasked Attorney General Eric Holder with the creation of a financial crimes unit that would target grand-scale fraud.
The President also proposed to set aside more federal land for the extraction of natural gas, with the caveat that companies that engage in “fracking” must fully disclose the chemicals they use in their extraction methods.
Mr. Obama also endorsed partnerships between businesses and community colleges to give people the necessary skills to fill for vacant, specialized jobs.
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