FT: Obama's State of the Union calls for higher taxes on wealthy - Spear's Magazine

FT: Obama’s State of the Union calls for higher taxes on wealthy

Barack Obama laid down the battle lines for the presidential election Tuesday night as he promised a “fairer” tax regime on the day Mitt Romney, the leading Republican contender, revealed that he paid federal income taxes at an effective rate of just 13.9 per cent in 2010

Barack Obama laid down the battle lines for the presidential election Tuesday night as he promised a “fairer” tax regime on the day Mitt Romney, the leading Republican contender, revealed that he paid federal income taxes at an effective rate of just 13.9 per cent in 2010.

The comparatively low rate reflects the fact that most of Mr Romney’s income is taxed as capital gains, an issue that Mr Obama tackled head-on in his State of the Union address.

The US president said tax reform and budget reduction should be guided by the principle that anyone with annual income of more than $1m should pay a minimum effective tax rate of 30 per cent.

Mr Obama’s benchmark – the Buffett rule, named after Warren Buffett – says the richest Americans should not pay tax at a lower rate than their secretaries, a policy dressed up by inviting the billionaire investor’s long-time personal assistant to watch the address from the first lady’s box in Congress.

“You can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense,” he said.

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