By Judith Ugwumadu | 21 January 2015
The US is set to impose tax increases on the richest 1% of Americans as it continues on its journey out of recession, President Barack Obama said in his State of the Union address yesterday.
Obama said 2014 had been a breakthrough year for America and the economy was growing and creating jobs at the fastest paces since 1999.
But the president asked both the Democrats and the Republicans whether the US would accept an economy where only few did ‘spectacularly well’ or if they would commit to an economy that generated rising incomes and chances for everyone.
He called on lawmakers to increase capital gains taxes and tighten up the taxes applied to inherited wealth.
‘For far too long, lobbyists have rigged the tax code with loopholes that let some corporations pay nothing while others pay full freight. They’ve riddled it with giveaways that the super-rich don’t need, while denying a break to middle-class families who do,’ Obama said.
Two weeks from now, the president will send Congress a budget ‘filled with ideas that are practical, not partisan’, he added.
Listing a series of policies for maintaining US economic growth and competitiveness, he said: ‘Let’s close loopholes so we stop rewarding companies that keep profits abroad, and reward those that invest here in America.
‘And let’s close the loopholes that lead to inequality by allowing the top 1% to avoid paying taxes on their accumulated wealth.’
He also pledged on using the extra tax revenue on developing the US’s infrastructure, promising to modernise ports, build stronger bridges and introduce faster trains and the fastest Internet connection in the world.
Obama said he would also use the additional public funds to guarantee paid sick and paid maternity leave to working families, as well as lowering the cost of attending community college to zero.
‘At this moment – with a growing economy, shrinking deficits, bustling industry, booming energy production – we have risen from recession freer to write our own future than any other nation on earth. It’s now up to us to choose who we want to be over the next 15 years and for decades to come,’ he said.
