Washington - President Barack Obama threw red meat to his
political base on Tuesday with a promise to do the nearly impossible: solve the
problem of widening US income inequality.
Faced with the very real possibility of losing the White
House in November, Obama used his State of the Union address to demand a tax
increase for millionaires and launch an aggressive campaign arc built upon
"No debate is more important," Obama said early in
his hour-long speech before a joint session of Congress.
"We can either settle for a country where a shrinking
number of people do really well while a growing number of Americans barely get
by, or we can restore an economy where everyone gets a fair shot, and everyone
does their fair share, and everyone plays by the same set of rules."
In recent months, Obama had made clear he would mine the
vein of resentment in America over the growing income gap, the source of
inspiration for last year's Occupy Wall Street movement that highlighted the
concentration of wealth among 1% of the population.
But by choosing to make it the cornerstone of his annual
speech to the nation, he cemented the theme of working for the 99% as his
campaign battlecry for the next 10 months.
He could not have chosen a better day to contrast his
populist ideas with his possible Republican challenger.
Mitt Romney, one of the wealthiest presidential candidates
in history, released tax returns on Tuesday that showed he and his wife paid an
effective tax rate of 13.9% in 2010 and expect to pay a 15.4% effective tax
rate for 2011.
Obama proposed a minimum tax rate of 30% for people who make
$1m or more a year, a clear shot at his would-be rival, even though he was
unnamed in the speech.
"I think it's one of the best cards he can play,
especially given that Mitt Romney released his tax returns today," said
Henry Brady, dean of the Goldman School of Public Policy at the University of
"People are worried about fairness in the tax code. So
it seems to me that this is something where he has the rhetorical
Senior administration officials said the 30% figure was
established long before Romney's tax rate was made public.
One noted, however, that not all wealthy people kept their
money in accounts on the Cayman Islands, a dig at the former Massachusetts
governor, whose advisers said his holdings included amounts in funds based in
the Cayman Islands and other overseas entities.
Obama's tax reform proposal, made on one of the biggest
campaign stages of the year, is the latest in a series of moves the president
has made to appeal to the middle class and to present a populist message.
The president's autumn deficit reduction proposals and
recent appointment of a director to lead the consumer financial protection
agency that is unpopular with Republicans have raised the temperature and
highlighted the contrasts between him and the opposition party.
Nevertheless, the president knows he has almost no chance of
getting his millionaire tax proposal through a divided Congress.
But the issue gives him a strong talking point to energise
his political base, much of which has been disenchanted with his record.
"It's a great issue for President Obama. It's something
that his base has been waiting for," said Democratic strategist Bud
Jackson. "He has started to move to a more combative approach in terms of
contrasting himself with Republicans ... and I also think that dovetails nicely
with Mitt Romney or Newt Gingrich or whoever the nominee will be."
The president will take the message on a five-state,
three-day trip beginning on Wednesday.
The state choices are not coincidental. He is going to Iowa,
Arizona, Nevada, Colorado, and Michigan - all battlegrounds that could help
decide the general election.
Officials said he would release more details about his
business, energy, and college affordability proposals during the trip.
Supporters are eager to have more details - and more red
"I did particularly like that he described income
inequality and the support of the middle class as the defining issues of our
time," said James Catalano of Tampa, Florida, who attended a party with
other Democrats to watch the speech.
"I thought it was really moderate and reasonable, which
was a little frustrating."