President Obama will lay out an official policy of picking winners and losers in this Tuesday’s State of the Union address. We already know that the Administration’s new messaging tactic involves a lot less policy and a lot more emotional manipulation, but its latest announcement regarding a plan to penalize the nation’s top earners takes populist sentiment to a new level.
Via Bloomberg (emphasis mine):
The president’s address is intended to lay out an agenda for his final two years in office and help the Democratic Party retain the White House in the 2016 election with a legacy of policies that appeal to middle- and lower-income voters, who continued to lose ground as the economy rebounded from the recession.He would increase the top tax rate on capital gains and dividends to 28 percent from 23.8 percent. The rate was 15 percent when Obama took office in 2009, meaning that he’s proposing to almost double it over his two terms in office.He would also impose capital-gains taxes on asset transfers at death, ending what the White House calls “the largest capital gains loophole.” Under current law, assets held until death aren’t subject to those levies, creating an incentive for wealthy people to hold onto them. Heirs only have to pay capital-gains taxes when they sell and only on the value above what the assets were worth at death.
These changes will stash away $320 billion over the next to years and make it possible for the President to carve out new tax credits for higher education, child care, and dual-income households. It’s vintage Obama, and not unexpected from a President who has made a name for himself by advocating against the interests of those who create jobs and drive the economy.
Progressives are touting this as “tax relief” for a struggling middle class, but what it really is is income redistribution at its most blatant. Republican leadership knows this, and are taking every opportunity to remind the President that elections have consequences:
Obama’s call for higher taxes on the wealthy is likely to further antagonize Republicans who are already angry with the president over his vows to veto several of the party’s priorities, including legislation to approve construction of the Keystone XL oil pipeline, make changes to the president’s signature health care legislation and block his executive actions on immigration.Republicans say Obama’s veto threats are a sign of a president who didn’t get the message from voters who relegated his party to minority status in the November election. New Senate Majority Leader Mitch McConnell, R-Ky., said the president still has a chance to change his tone.”Tuesday can be a new day,” McConnell said. “This can be the moment the president pivots to a positive posture. This can be a day when he promotes serious realistic reforms that focus on economic growth and don’t just spend more money we don’t have. We’re eager for him to do so.”
McConnell’s trolling aside, I think we all know what this is—an attempt by a failed president to throw everything he can against the wall in hopes that something might stick. He’s lost his majority; the only thing left to do is attempt to salvage whatever chance remains of his “legacy.”
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