This article first appeared at The McAlvany Intelligence Advisor on Monday, January 19, 2015:
An anonymous source at the White House leaked the details of Obama's State of the Union speech scheduled for Tuesday night. In a move deliberately designed to infuriate Republicans who thought they might hear from a repentant president sincerely interested in reconciliation, he will instead poke them all in the eye in a move that the New York Times called “audacious.”
Not happy with increasing the capital gains tax rate by 58 percent so far in his administration, from 15% to 23.8%, he will announce his plan to nearly double it, to 28%. Furthermore, his listeners can expect to hear him equate that goal with Ronald Reagan, noting that 28% is the same rate as it was “under Reagan.” This is a political move implying that if it was ok for him, it's ok for us.
He's found another loophole to close. It's the “step-up in basis” that occurs when property is passed from one generation to another. But he'll be in charge of changing the language on Tuesday night and his listeners will hear him call it the “trust fund loophole” whereby the appreciation in assets inherited is not taxed under the current law. Since there's billions being transferred from the baby boomers to their kids over the next decade, Obama only thinks it's fair to capture part of that and put it to good use.
When Republicans balk at doing any such thing, this will serve the Democrats nicely come 2016, charging that Republicans want to protect their “trust fund babies” and their wealthy capitalist friends who haven't been “paying their fair share.” It's class warfare at its finest, with the political twist thrown in.
He also wants to have any financial institution with $50 billion in assets or more to pay a “fee” designed to make it more expensive for them to operate their derivatives trading desks. Any Republican voting against that will be charged, once again, with favoritism and protecting their rich donors.
What will he do with the money in the (extremely unlikely) event such an outrage makes it into law? He has plans:
Providing students up to $2,500 a year towards completing a college degree, estimated to “help” 8.5 million families;
Tripling the child-care tax credit to $3,000 per child under age 5, estimated by the White House to “help” another 5 million families; and
Creating a new $500 “second earner” tax credit to help support households where both spouses work, “helping” another 24 million couples.
He will couch his proposal in terms of the recovering economy, with words like “comeback,” “momentum,” “rising wages,” and “growing incomes” sprinkled throughout his speech. He'll want to “make sure that this prosperity is shared by the middle class.”
Not only is this class warfare at its finest, with the political poison pill for Republicans thrown in, it's a measure of how little Obama has backed off from his Marxist ideologies. John C. Drew was a classmate of Obama at Occidental College who shared the same Marxist worldview. In February, 2010, Drew, now a convert to the real world, remembered Obama:
My most vivid member of my time visiting with Obama was the way he strongly argued a rather simple-minded version of Marxist theory. I remember he was passionate about his point of view. As I remember, he was articulating the same Marxist theory taught by various professors at Occidental College.
With this simple-minded theory and his passion, Obama caught the attention of hard-core Marxists Bill Ayers, Bernadine Dohrn, and Alice Palmer. Wrote Drew:
My gut feeling is that Obama won the trust of folks like Alice Palmer because he never surrendered that uncompromising Marxist/socialist ideology I saw in him as a sophomore at Occidental College back in 1980.
That simple-minded ideology was best summed up by karl marx himself when, after explaining how the complete destruction of private property would allow a new world free of selfishness and greed to emerge, that new world would provide “from each according to his abilities, to each according to his needs.”
If it were up to him, Obama would raise the capital gains tax to 100 percent, would tax the rich 100 percent of their wealth, end the ownership of private property, and let the government manage everything. That he would present this “modest proposal” in front of the Congress now populated by Republican majorities without turning a hair is a measure of his continued uncompromising position as a Marxist.
The leadership of the Republican Party is blind to all of this. Newly-minted Senate Majority Leader Mitch McConnell stated that he hoped Obama would seize the opportunity to create “a new day” in Washington, one where both sides would work together in a spirit of compromise and reconciliation. Said Mitch:
Tuesday can be a new day. This can be the moment the president pivots to a positive posture. This can be a day when he promotes serious realistic reforms that focus on economic growth and don't just spend more money [that] we don't have.
We're eager for him to do so.
Instead what McConnell is going to hear Tuesday night is the ideology of an unrepentant Marxist insisting that his “way forward” is the only way, and that Republicans are stumbling blocks in his way. His crafters of his State of the Union speech have managed not only to present this ideology clearly, but in such a way as to do the most possible political damage to those few Republicans still trying to blunt his assault on America. He won't get his proposal passed. He won't even get it considered. What it will do is provide grist to attack Republicans in the 2016 presidential campaign.
Washington Times: Obama's State of the Union speech to include $320B tax hike proposal
USAToday: Obama to unveil tax package at State of the Union
NBC News: What to Expect From Obama's State of the Union Speech
NPR.org: Obama To Call For A Tax Hike For The Wealthy In State Of The Union
CSMonitor: Obama previews State of Union with ‘comeback' address: Can Americans take heart?
The Blaze: Obama to Call for Tax Hikes on Wealthy — Right in Front of New Republican-Led Congress
New York Times: Obama Will Seek to Raise Taxes on Wealthy to Finance Cuts for Middle Class
Brainy Quote: Karl Marx's quote: From each according to his abilities, to each according to his needs.