WASHINGTON — House and Senate Republicans are rejecting President Barack Obama’s suggestion to reform tax code that allows heirs to inherit extreme amounts of wealth largely tax-free.
“Let’s close the loopholes that lead to inequality by allowing the top 1 percent to avoid paying taxes on their accumulated wealth,” Obama said Tuesday night during his annual State of the Union address. “We can use that money to help more families pay for child care and send their kids to college.”
A variety of tax strategies exist to shield much of an inheritance from taxation. And that, said Rep. Jason Chaffetz (R-Utah), is as it should be. Chaffetz moved quickly from talking points to genuine anger in responding to the president’s proposal. “That’s a non-starter. The audacity, that he thinks the government has a right to people’s money? He wants to transfer wealth,” Chaffetz said. “It’s one of the most immoral things you can do, is try to steal somebody’s inheritance, to steal it away from their family.”
The Republican success over the last two decades in reshaping the debate over inheritance has virtually eliminated the taxes owed by the offspring of the uber-wealthy, who inherit trusts set up in their names or stock on which they owe no capital gains taxes. The cost to the Treasury has been hundreds of billions of dollars, while the cost to the social fabric has come in yawning wealth inequality disconnected from the American notion of equal opportunity and reward for hard work.
Popular debate around taxation over the last several decades has largely focused on income taxes, while Republicans have renamed the inheritance tax a “death tax” that destroys small businesses and family farms.
“That is DOA,” said Sen. John Hoeven (R-N.D.). “Think about all of the small businesses and the farms, and how are you going to maintain a small business or pass a farm on to your kids? They grew up on that farm, they worked on that farm, and then they have to sell it when you die? I mean come on, that’s not how you foster small businesses or entrepreneurship.”
The GOP argues that an inheritance tax forces heirs to sell the farm in order to pay the tax, but no taxes are owed on the first $5 million in value inherited, meaning any farm or small business hit would need to be rather big.
Sen. Marco Rubio (R-Fla.), who is flirting with a presidential bid, said there was no need to punish the children of the rich. “My preference is to have as much money available for people to reinvest back into the economy,” he said. “I think we can succeed at helping the middle class without having to go after anybody, or make an example of anybody, or punish anyone.”
Sen. Joe Manchin, a conservative Democrat from West Virginia, said he’d be okay with a proposal that had a large exemption, as it would hit few people where he’s from. “That makes a lot of sense,” he said of the president’s pitch. “I think it’s over a threshold of $10 million or more, so basically West Virginians would be okay with that. That wouldn’t hurt too many West Virginians.”
HuffPost’s Ryan Grim reports:
House and Senate Republicans are rejecting President Barack Obama’s suggestion to reform tax code that allows heirs to inherit extreme amounts of wealth largely tax-free.
“Let’s close the loopholes that lead to inequality by allowing the top 1 percent to avoid paying taxes on their accumulated wealth,” Obama said Tuesday night during his annual State of the Union address. “We can use that money to help more families pay for child care and send their kids to college.”
A variety of tax strategies exist to shield much of an inheritance from taxation. And that, said Rep. Jason Chaffetz (R-Utah), is as it should be. Chaffetz moved quickly from talking points to genuine anger in responding to the president’s proposal. “That’s a non-starter. The audacity, that he thinks the government has a right to people’s money? He wants to transfer wealth,” Chaffetz said. “It’s one of the most immoral things you can do, is try to steal somebody’s inheritance, to steal it away from their family.”
Read more here.
HuffPost’s Elise Foley reports:
The White House and members of Congress often make political statements through their choice of guests for the State of the Union. There is no place that gets more attention than the first lady’s box, where the guest list serves as an illustration of the president’s priorities for the upcoming year. For the past few years, that list has included Dreamers: Alan Aleman attended as one of the first lady’s guests in 2013. In 2014, it was Avila. And this year, 21-year-old Dreamer Ana Zamora was one of Michelle Obama’s guests. Other undocumented immigrants, some of them Dreamers, also attended this year, as guests of Senate Minority Leader Harry Reid (D-Nev.) and Reps. Mike Honda (D-Calif.), Mark Takano (D-Calif.) and Tony Cárdenas (D-Calif.).
Even in a speech in which Obama said the word “immigration” only twice — plus “immigrant” and “immigrants” once each — the presence of those guests was meant to send a message that Democrats are committed to programs like Deferred Action for Childhood Arrivals, or DACA, which allows Dreamers to remain in the country. House Republicans voted last week to end that policy, along with elements of the measures Obama announced in November, such as protections for parents.
Read the full story here.
HuffPost’s Ariel Levy reports:
Americans who watched President Barack Obama’s State of the Union address largely approved, giving him better marks than they did for last year’s speech, according to instant polling conducted by CNN.
Positive ratings from State of the Union watchers are the rule, not the exception. CNN found Obama getting high marks in all five annual State of the Union speeches they previously polled (the network didn’t conduct a post-State of the Union poll in 2012). Former presidents George W. Bush and Bill Clinton also received largely positive ratings.
Eighty-one percent of viewers had a somewhat positive or very positive opinion of the 2015 State of the Union, according to CNN — up from 76 percent in 2014, and in line with ratings for Obama’s speeches in 2011 and 2013.
Read more here.
HuffPost’s Jennifer Bendery reports:
President Barack Obama pushed Congress Tuesday night to restore a key portion of the 1965 Voting Rights Act, even though Republicans signaled last week they have no intention of doing so.
“We may go at it in campaign season, but surely we can agree that the right to vote is sacred; that it’s being denied to too many; and that, on this 50th anniversary of the great march from Selma to Montgomery and the passage of the Voting Rights Act, we can come together, Democrats and Republicans, to make voting easier for every single American,” Obama said during his State of the Union address.
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Parents, teachers and policymakers who listened to Tuesday night’s State of the Union address heard an earful from President Barack Obama about his intentions to retool education’s bookends by making community college free, expanding child care and increasing cybersecurity for students.
Obama mentioned few specifics about K-12 education, one of his administration’s top priorities during his first term. Notably, the president mentioned not one word directly about one of his education secretary’s priorities for 2015: rewriting the much-maligned No Child Left Behind Act, the Bush-era school accountability law. Obama also failed to mention the words teacher and testing.
Read more here.
“Last month, we launched a new spacecraft as part of a re-energized space program that will send American astronauts to Mars,” Obama said. “In two months, to prepare us for those missions, Scott Kelly will begin a year-long stay in space. Good luck, Captain — and make sure to Instagram it.”
Hey, Trade Promotion Authority finally gets the GOP out of their seats!
— Mike O'Brien (@mpoindc) January 21, 2015
HuffPost’s Elise Foley reports:
There’s a major fight brewing in the Capitol over President Barack Obama’s immigration policies, and whether funding for the Department of Homeland Security should be threatened to stop them. But you wouldn’t necessarily know it from the president’s State of the Union address on Tuesday.
Obama only mentioned the word “immigration” twice, and didn’t make the impassioned pleas he has in years past for immigration reform. There was no call for a vote on a comprehensive immigration bill, or even smaller legislative measures like help for young undocumented immigrants who came to the U.S. as children.
Instead, Obama’s message was that Congress should stop fighting him on immigration. Or, more specifically, that they should stop fighting his executive actions to protect some undocumented immigrants from being deported.
“If we’re going to have arguments, let’s have arguments — but let’s make them debates worthy of this body and worthy of this country. … Yes, passions still fly on immigration, but surely we can all see something of ourselves in the striving young student, and agree that no one benefits when a hardworking mom is taken from her child, and that it’s possible to shape a law that upholds our tradition as a nation of laws and a nation of immigrants,” Obama said.
Read the full story here.
Some fun on the floor, as Gillibrand makes a "come onnnnn" hand gesture when the Repubs around her didn't stand for pay equity #SOTU2015
— daveweigel (@daveweigel) January 21, 2015
“To everyone in this Congress who still refuses to raise the minimum wage, I say this: If you truly believe you could work full-time and support a family on less than ,000 a year, go try it,” Obama said. “If not, vote to give millions of the hardest-working people in America a raise.”
“Today, we’re the only advanced country on Earth that doesn’t guarantee paid sick leave or paid maternity leave to our workers. Forty-three million workers have no paid sick leave. Forty-three million. Think about that. And that forces too many parents to make the gut-wrenching choice between a paycheck and a sick kid at home,” Obama said. “So I’ll be taking new action to help states adopt paid leave laws of their own. And since paid sick leave won where it was on the ballot last November, let’s put it to a vote right here in Washington. Send me a bill that gives every worker in America the opportunity to earn seven days of paid sick leave. It’s the right thing to do.”
Obama went back to speaking on Rebekah and Ben, saying for a couple like them, “Friday night pizza is a splurge.”
“Because families like Rebekah’s still need our help. She and Ben are working as hard as ever, but have to forego vacations and a new car so they can pay off student loans and save for retirement,” Obama said.
“Basic childcare for [their children] Jack and Henry costs more than their mortgage, and almost as much as a year at the University of Minnesota,” Obama added. “Like millions of hardworking Americans, Rebekah isn’t asking for a handout, but she is asking that we look for more ways to help families get ahead.”
“We can’t slow down businesses or put our economy at risk with government shutdowns or fiscal showdowns,” Obama said. “We can’t put the security of families at risk by taking away their health insurance, or unraveling the new rules on Wall Street, or refighting past battles on immigration when we’ve got a system to fix. And if a bill comes to my desk that tries to do any of these things, it will earn my veto.”
Many in the chamber gave Obama a standing ovation when he mentioned “ten million uninsured Americans [who] finally gained the security of health coverage” this year.
Obama told the story of Rebekah Erler, a guest of first lady Michelle Obama at the SOTU, and her husband Ben.
“America, Rebekah and Ben’s story is our story. They represent the millions who have worked hard, and scrimped, and sacrificed, and retooled. You are the reason I ran for this office,” Obama said. “You’re the people I was thinking of six years ago today, in the darkest months of the crisis, when I stood on the steps of this Capitol and promised we would rebuild our economy on a new foundation. And it’s been your effort and resilience that has made it possible for our country to emerge stronger.”
