It's a pretty safe bet that Congress is not going to react to President Barack Obama's State of the Union address by immediately turning around and agreeing to his priorities like free community college and mandatory sick leave. When was the last time any presidential initiative got that kind of reception on Capitol Hill, particularly from the opposing party?
But that doesn't mean that the agenda President Obama is expected to outline tonight is not worthwhile. A nation's leader ought to stand for something, and raising taxes on the wealthiest Americans while easing them on the middle class and the working poor is not only a worthwhile objective, it's a no-brainer.
Even various Republican leaders have acknowledged that the nation's tax code would be better with fewer loopholes, and Mr. Obama's ideas target some particularly egregious ones. His objective is not to grow government so much as shift the burden of paying for it toward those with deeper pockets. Surely, the top 1 percent of earners can afford to pay a bit more in capital gains taxes while Mr. and Mrs. Joe Average could use a bigger child care tax credit, which is exactly what the administration is proposing.
How much longer are Americans going to tolerate the Republican view of taxation that claims the rich are "job creators" while the rest of us are living off their largesse? It didn't work for Mitt Romney, and it surely won't fly for whomever the party nominates to be at the top of the ticket in 2016. That the U.S. prospered with higher income tax rates when Ronald Reagan was in the White House is conveniently forgotten. Trickle-down economics doesn't work, but that hasn't stopped its defenders from claiming it does, often and loudly.
This isn't economic populism or "wealth redistribution" or "class warfare" or the other excuses conservatives like to trot out when they defend a tax system that favors the rich. It's more like common sense. If there is a pattern to this nation's economic recovery, it's been that the rich are getting richer, and the tax code is helping make this possible. Even a significant reduction in the unemployment rate hasn't made a dent in this pattern.
The income imbalance isn't even restricted to the United States. A study recently released by Oxfam projects that the world's richest 1 percent will soon own more than half of the world's total wealth — likely by sometime next year. Does anyone think the yacht-and-mansion crowd can't afford to pay a little more in taxes or that somehow paying a slightly higher capital gains tax rate (28 percent, which was the same as existed under President Reagan, instead of 23.8 percent) will cause the super-wealthy to stop investing altogether?
Here's one of the more egregious tax dodges for the wealthy Mr. Obama wants to close — the so-called trust-fund loophole, officially known as the "step-up in basis rule." It allows gains in inherited property to go untaxed — for instance, stock holdings purchased for $1 million and valued at $10 million at the time of the owner's death avoid capital gains taxes entirely.
The president wants to use some of this revenue from these changes in the tax code to finance not only a tripling of the child care tax credit for children under age 5 but to raise the deduction for working couples with children. He would also like to raise the Earned Income Tax Credit and expand tax credits for higher education. All are sensible investments in the future at a modest cost.
Of course, these proposals, even if magically adopted by Congress, wouldn't by themselves solve the widening problem of income inequality. But they do point to where the conversation in Washington ought to be focused — on easing the burden on middle class families while asking for more from those who can easily afford to pay it.
In the age of Twitter and Facebook, State of the Union speeches may seem a bit anachronistic and dated. A president doesn't really need to speak to a joint session of Congress to express his views to them or to the American people. But there is something to be said for a president having an economic plan for this nation and expressing it clearly and unabashedly while looking into the faces of his harshest critics who are, of course, free to offer their customary counter-arguments. Defending a do-nothing approach to a tax code that actually worsens income inequality seems like the tougher sell to us.