State of the Union: President’s address raises tax issues

President’s address raises tax issues at high level

President Obama last night, in his State of the Union address, raised tax issues at a high level in discussing “middle-class economics” and describing his vision for the United States.

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Among the topics, the president:

  • Indicated that his budget plan would make childcare more available and affordable for middle-class and low-income families with young children, in part through a new tax cut of up to $3,000 per child per year.
  • Advocated closing loopholes “so we stop rewarding companies that keep profits abroad, and reward those that invest in America.” He encouraged using the resulting “savings” to rebuild infrastructure and “make it more attractive for companies to bring jobs home.”
  • Encouraged closing loopholes that allow “the top one percent to avoid paying taxes on their accumulated wealth,” and to use the revenue raised “to help more families pay for childcare and send their kids to college.”
  • Urged tax simplification, indicating that a small business owner should be able to file a tax return “based on her actual bank statement, instead of the number of accountants she can afford.”

The president did not discuss business tax reform.*

*Note however, that Treasury Secretary Lew indicated, in a speech presented this morning, that “…there is a growing bipartisan consensus in Washington on how to achieve business tax reform, and we have a unique opportunity now to get this done.”

Although the president did not provide further details regarding his proposed changes to tax law, the White House released a “fact sheet” a few days ago that listed some of the specific tax proposals in the president’s plan. 

Additional details regarding the tax components of the president’s plan, and technical details, may be provided in the administration’s budget proposal for FY 2016, expected to be released February 2, 2015.

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