Obama urges taxing the rich, reining in Wall St.

WASHINGTON – US President Barack Obama used his last State of the Union speech before the November election to paint himself as the champion of the middle class, by demanding higher taxes for millionaires and tight reins on Wall Street.

Taking advantage of a huge national platform to make the case for his re-election, Obama on Tuesday defiantly defended his record after three years in office and laid blame for many of the country’s woes at the feet of banks and what he called an out-of-touch Congress.He proposed sweeping changes in the tax code and new remedies for the US housing crisis, setting as a central campaign theme a populist call for greater economic fairness.He mentioned taxes 34 times and jobs 32 times during his hour-long speech, emphasising the two issues at the heart of this year’s presidential campaign.While the biggest proposals in Obama’s speech are considered unlikely to gain traction in a deeply divided Congress, the White House believes the president can tap into voters’ resentment over the financial industry’s abuses and Washington’s dysfunction.But even as he called for a ‘return to American values of fair play and shared responsibility,’ Obama seemed to put no blame on himself for a still-fragile economic recovery and high unemployment that could trip up his re-election bid.With polls showing most Americans disapprove of his economic leadership, he still faces the stiff challenge of convincing them that the candidate who was swept into the White House in 2008 promising hope and change now deserves another term.Standing before a joint session of Congress, Obama unleashed a partisan attack over taxes and vowed no return to ‘the days when Wall Street was allowed to play by its own set of rules.’’Washington should stop subsiding millionaires,’ Obama declared as he proposed a minimum 30 per cent effective tax rate on those who earn a million dollars or more.Obama said he would ask his attorney general to establish a special financial crimes unit to prosecute those parties charged with breaking the law, and whose fraud contributed to the 2007-2009 financial crisis that plunged the United States into recession.Obama’s message could resonate in the 2012 campaign following the release of tax records by Mitt Romney, a potential Republican rival and one of the wealthiest men ever to run for the White House. He pays a lower effective tax rate than many top wage-earners.A new proposal outlined by Obama to ease the way for more American homeowners to get mortgage relief – and to pay for the plan with a fee on banks blamed for helping create the housing crisis – also struck a populist note.Democrats have hammered Republicans in Congress for supporting tax breaks that favour the wealthy. Republicans staunchly oppose tax hikes, even on the richest Americans, arguing they would hurt a fragile economic recovery.’No feature of the Obama presidency has been sadder than its constant efforts to divide us, to curry favour with some Americans by castigating others,’ Indiana Governor Mitch Daniels said in the Republican response to Obama.House of Representatives Speaker John Boehner, the top congressional Republican, insisted the election would be a referendum on the president’s ‘failed’ policies.The US unemployment rate was 8,5 per cent in December. No president in the modern era has won re-election with the rate that high.Obama used the speech to revive his call to rewrite the tax code to adopt the so-called ‘Buffett rule,’ named after the billionaire Warren Buffett, who says it is unfair that he pays a lower tax rate than his secretary.In his speech, Obama also rolled out proposed corporate tax reforms, including a minimum rate on companies’ overseas profits and a tax credit for moving jobs back home. – Nampa-Reuters

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