U.S. President Barack Obama has made the case that whoever wins the upcoming election will face an economy still recovering from the “worst economic calamity since the Great Depression” and many Americans will still be looking for jobs and lacking financial security.
By next year, the “debt that has grown over the last decade, primarily as a result of two wars, two massive tax cuts and an unprecedented financial crisis, will have to be paid down,” he says.
Last week, Obama sharply criticized a $3.5 trillion budget proposal pushed by Republican Paul Ryan, chairman of the House Budget Committee. The plan has faced fierce resistance from Democrats, who say it would gut Medicare, slash taxes for the wealthy and lead to deep cuts to crucial programs.
“Disguised as deficit reduction plan, it’s really an attempt to impose a radical vision on our country,” Obama said in excerpts of his speech released April 3rd. “It’s nothing but thinly veiled social Darwinism and is an attempt to impose a radical vision on our country that will hurt the pocketbooks of working families.”
On taxes, Obama is calling for economic fairness, which is encapsulated by the “Buffett Rule”. The rule, named after Warren Buffett and inspired by his call for taxes on the rich, asserts that the wealthy shouldn’t pay a smaller share of their income in federal taxes than middle-class taxpayers.
Many wealthy taxpayers earn investment income, which is taxed at 15%, and Obama has proposed that people earning at least $1 million annually—whether in salary or investments—should pay at least 30% of their income. Households with a minimum rate for incomes between $1 million and $2 million would calculate their taxes normally, and using the minimum tax rate, then pay the higher amount.
Obama notes that “broad-based prosperity has never trickled-down from the success of a wealthy few. It has always come from the success of a strong and growing middle class.”
Amy Brundage, a White House spokeswoman, has also added, “Making sure that everyone plays by the same set of rules is key to ensuring the economic security of the middle class.”
The strong push for the tax reform comes ahead of an April 16 vote that will decide whether the Senate will even debate the bill. Democrats expect the 60-vote threshold won’t be reached since the Republicans are expected to make the case that raising taxes—even on the very wealthy—would do little to help the economy.
“This proposal won’t create a single job or lower the price at the pump by a penny, but may have the opposite effect,” said Senator Mitch McConnell of Kentucky, the senate minority leader, in a release.
White House officials, in a conference call yesterday, sought to strengthen their case for the Buffett Rule. They showcased the declining taxation of high-income households in the U.S., as well as the rising income inequality in recent decades.