NEW YORK (MainStreet) — Following severe losses in the midterm elections, President Obama used his third State of the Union address to lay out a wish list of policies for the year to come, ranging from education investments to debt-reduction tactics, which he believes should be able to earn bipartisan support.
While many of the initiatives mentioned in the speech Tuesday were decidedly vague, several would undoubtedly have a big impact on consumers and small business owners if they are successfully passed. We’ve rounded up some of the highlights from the president’s hour-long speech so you know the new policies to expect from the 112th Congress.
Simplifying the Tax Code
Midway through his speech, President Obama briefly mentioned his desire to change the current tax code to make it easier for all Americans to understand.
“In fact, the best thing we could do on taxes for all Americans is to simplify the individual tax code,” the president said. “This will be a tough job, but members of both parties have expressed an interest in doing this, and I am prepared to join them.”This led to some of the loudest applause of the night, from Republicans and Democrats alike, but what exactly does it mean?
According to previous statements that the president and others have made, the goal here is twofold. First, the Obama administration wants to stop special interest groups from manipulating loopholes in the tax code to “game the system,” which in turn robs the government of significant tax revenues. At the same time, the president’s goal is to make the tax system simpler so that the average American can better understand how the tax system works and ultimately stop dreading the process of filing returns.
Ending Bush-Era Tax Cuts
It’s barely been a month since the White House brokered a deal with Republicans to extend tax cuts on all Americans for another two years, including those households earning more than $250,000 a year, but President Obama was unequivocal about ending these tax cuts for the wealthiest Americans once and for all when they expire at the end of 2012.
“If we truly care about our deficit, we simply can't afford a permanent extension of the tax cuts for the wealthiest 2% of Americans,” Obama said. “Before we take money away from our schools, or scholarships away from our students, we should ask millionaires to give up their tax break. It's not a matter of punishing their success. It's about promoting America's success.”