State of the Union: What you need to know. President Obama delivered a big helping of the deeply populist tone he’s adopting as this election year heats up – railing against economic inequality and pushing for a revamp of the tax code. He touted his toughness on China, called for more investment in infrastructure and said he was opening up more public land for energy exploration. Most of the proposals were light on details and won’t get far in Congress – something Obama acknowledged when he touched on the fact that most people think Washington is broken. Here’s the full text of the speech and here are the highlights:
Payroll tax cuts: Obama urged a quick extension of the payroll tax cuts for the rest of the year and called for expanded tax relief to small businesses.
Outsourcing: Obama said he wanted to do away with tax breaks for companies that send “jobs and profits” overseas and he would require that all companies pay a minimum tax on overseas profits. He said companies that manufacture in the U.S. should get a tax break and high-tech manufacturers should get double.
Buffett Rule: With Warren Buffett’s secretary, who pays a higher tax rate than her boss, in attendance, the president fleshed out the Buffett rule, proposing that households earning more than $1 million a year face a minimum 30% federal income tax.
Financial regulation: Obama said he would establish a financial crimes unity at the Justice Department to go after large-scale financial fraud. And he introduced the CFPB head, saying “American consumers finally have a watchdog in Richard Cordray with one job: To look out for them.”
The day ahead. The Fed begins a new era of openness as it releases detailed interest-rate projections — for the first time ever. As Ahead of the Tape’s Kelly Evans says, even if the FOMC signals more bond-buying at the end of its policy meeting today, “the biggest news is likely to come from the rate projections. That isn’t just because they are new, but because they could show Fed officials plan to leave short-term rates at near-zero levels even longer than through mid-2013.” Also, we get pending home sales index for December — economists expect a decline after November’s 7.3% jump. And the World Economic Forum kicks off in Davos.
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