State of the Union 2015: Countering economic inequality

Wednesday, January 21, 2015

WASHINGTON, D.C. - In last night's State of the Union (SOTU) address, the focus was on the middle class, or what President Obama referred to as "Middle Class Economics." Though his speech outlines an agenda he hopes Congress will adopt, it is doubtful Republicans will answer the president's Call To Action in the upcoming year.

In case you missed it, Consumer Action highlights a few of the president's proposals designed to help consumers make ends meet, increase their earnings and save on taxes:

MIDDLE CLASS ECONOMICS: The theme of the evening included a set of proposals intended to help middle class families get past the economic stagnation that still remains for many.

“Middle-class economics means helping working families feel more secure in a world of constant change. That means helping folks afford childcare, college, health care, a home, retirement – and my budget will address each of these issues, lowering the taxes of working families and putting thousands of dollars back into their pockets each year… That's what middle-class economics is: the idea that this country does best when everyone gets their fair shot, everyone does their fair share, everyone plays by the same set of rules…These ideas won't make everybody rich, won't relieve every hardship. That's not the job of government.”

CHILDCARE: A new tax cut proposal of up to $3,000 per child, per year (triple the current $1,000 benefit).

“In today’s economy, when having both parents in the workforce is an economic necessity for many families, we need affordable, high-quality child care more than ever. It's not a ‘nice-to-have’: it's a must-have. So it's time we stop treating childcare as a side issue, or a women's issue, and treat it like the national economic priority that it is for all of us."

MANDATORY PAID LEAVE: A proposal that every worker receives up to seven days of paid leave.

"Today, we are the only advanced country on Earth that doesn't guarantee paid sick leave or paid maternity leave to our workers. Forty-three million workers have no paid sick leave… Send me a bill that gives every worker in America the opportunity to earn seven days of paid sick leave."

RAISING MINIMUM WAGE: The president asked Congress to pass a law guaranteeing equal pay for women and to raise the national minimum wage (though no exact figure was mentioned).

"If you truly believe you could work full time and support a family on less than $15,000 a year, try it."

FREE COMMUNITY COLLEGE: Extending free public education past high school to include two years of community college. This proposed plan would, by some estimates, cost $60 billion over the next decade. The President suggests that these costs could be offset by raising capital gains and broadening taxable inheritances. (See "Closing Tax Loopholes" below)

"America thrived in the 20th century because we made high school free, sent a generation of GIs to college and trained the best workforce in the world... [By 2020,] two in three job openings will require some higher education. Two in three! And yet, we still live in a country where too many bright, striving Americans are priced out of the education they need. It’s not fair to them, and it’s not smart for our future.”

CLOSING TAX LOOPHOLES ON WEALTHY AMERICANS: The president proposed raising the capital gains tax rate to 28 percent for wealthy Americans and require heirs to pay capital gains tax on any appreciated assets they inherit. Currently, inherited assets are valued at their current market value when received by heirs.

"...Let's close the loopholes that lead to inequality by allowing the top one percent to avoid paying taxes on their accumulated wealth. We can use that money to help more families pay for childcare and send their kids to college."

 

Want to read more? Check out these publications for highlights from the SOTU:
Full SOTU transcript:
https://medium.com/@WhiteHouse/president-obamas-state-of-the-union-address-remarks-as-prepared-for-delivery-55f9825449b2

The Washington Post outlined the SOTU speech by topic:
http://www.washingtonpost.com/graphics/politics/2015-sotu/speech/

Highlights by VOX, including an four minute video recap:
http://www.vox.com/2015/1/20/7864023/the-most-important-sentence-obamas-2015-state-of-the-union

The GOP’s response to the president’s speech:
http://www.npr.org/2015/01/20/378680893/transcript-gop-response-to-state-of-the-union-address