SOTU 2015: What Taxpayers Should Be Listening for from President Obama

David Williams

January 19, 2015

On Tuesday night, the President will be giving his sixth State of the Union address to Congress and the country. After you get past all the pomp and circumstance of his arrival on Capitol Hill and shaking the hands of members of Congress, President Obama will launch into his policy agenda for the next year.  The speech will not only be a preview for next year, but also be a peek into what his priorities will be and how he intends to deal with the new Republican majority in the Senate and increased Republican majority in the House. There will be opportunities for the President to reach out to the Congress to pass much-needed reform, but there will also be differences. Besides listening for buzzwords like “investment” which really means more spending, TPA will be listening very intently to the whole speech, but there will be a few issues that taxpayers should especially be listening for when President Obama speaks to the nation tomorrow night.

Tax Reform

This is an issue with heavy potential for bipartisan/bicameral reform to be achieved if the White House is ready to work together.  At the forefront of tax reform is corporate tax reform.  Currently, the U.S. has the highest corporate tax rate of 39 percent.  A bi-partisan effort has been underway for several years, including President Obama who talked about reducing the corporate tax rate in his 2012 State of the Union address.  In fact, on Wednesday February 22, 2012, the Obama Administration announced its proposal to cut the corporate tax rate from 35 percent to 28 percent. There is no reason that tax reform can’t happen this year. The President and Congress need to work together for both corporate and individual tax reform. The only question that remains now is how would those savings be used? Congress should push for any savings to go back into the economy and the hands of job creators, not to increase government spending on pet projects. One preview of the speech indicates that the President will be calling for a tax increase on the wealthy.  That idea is not likely to pass either chamber

Telecommunications

Telecom is an area that could prove to be the most contentious for the President and Congress.  Right now President Obama is forging ahead with plans to push the FCC towards net neutrality, focusing on reclassifying the Internet under Title II.  Reclassification would mean a government takeover of the Internet and a whole slew of new taxes for consumers and small businesses.  Last Wednesday, President Obama called on local governments to get into the Internet business by building taxpayer-funded broadband networks, even though laws in some states prohibit risky and expensive government-owned broadband networks.  The President pledged billions of taxpayer dollars to encourage cities to build broadband infrastructure.  This comes at a time when there have been several high profile failures across the country, including Chattanooga’s EPB.  Last September, TPA submitted lengthy comments on the failure (and bullying by EPB officials) of the system in Chattanooga (click here for the comments).  Finally, we have the Communications Act update.  This is way overdue, the last update was in 1996 and the laws that govern communications are out of date and have created more problems as technology advances every year. Congress is moving towards an update but the goal must be to ensure that new regulations and higher taxes on consumers and businesses are not part of any comprehensive legislation updating the Communications Act.

Solar Power

While you listen for catchphrases and buzzwords, be sure to listen for “green technology” and “renewable energy.”  One area that TPA has specifically focused on is solar power and the taxpayer subsidies being used to promote an energy source that isn’t ready for prime time. Visit www.solarsecrets.org to learn about how SolarCity, and other companies, have been using solar panel leasing to get major dollars in consumer tax credits that have kept the company afloat while it continues to fail to turn a profit, nor create savings for customers. As you’ll see on the website, in addition to taxpayer concerns, there are also safety and environmental concerns.

International Threats

Finally, TPA will be listening intently for what the President has to say about Defense spending. TPA encourages the President to call for more cuts in Defense spending.  There are plenty of weapons programs that can be cut to save the Pentagon money.   But, another international issue that we will be listening for is the threat of international taxation by international bodies such as the United Nations (UN).  The UN, with the help of other international bodies, has been trying to impose new taxes on U.S. taxpayers and businesses.  TPA led an international coalition letter (23 groups in 16 different countries) with Americans for Tax Reform to stop these international bodies from imposing taxes.  The President needs to recognize these threats and stop them immediately.  If the President fails to mention this issue (which is a safe bet), Congress needs to put pressure on the United Nations to stop these taxes by reducing the U.S.’s financial commitment to the UN.

Even though Tuesday night’s speech will likely last for nearly two hours, what taxpayers need to listen for are the issues that impact their wallets. President Obama will have many things to say and TPA will be paying careful attention to the parts of the speech that will have the greatest impact on taxpayers.