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The Bare Minimum You Should Know About Tonight's State Of The Union

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AP Photo / Larry Downing

Obama's New Progressive Tax Plan Targets Inequality

A centerpiece of Obama's speech will be the rollout of his new plan to raise taxes on high earners and cut taxes for the middle class, which lays down his marker on how to deal with rising inequality and stagnating wages.

Obama wants to close the "trust fund loophole," raise the top capital gains tax rate to 28 percent and impose a fee on risky financial transactions — projected to bring in $320 billion in new revenues. He will call for a $175 billion middle class tax cut, dramatically expanding the Child Tax Credit to $3,000 per child under 5, and free community college for two years (at a cost of $60 billion).

Obama Will Bait Republicans Into Defending The Wealthy


Obama's plan effectively dares the new Republican-led Congress to side with the wealthy by opposing the tax hikes. Key figures including House Ways & Means Chair Paul Ryan (R-WI) and Senate Finance Chair Orrin Hatch (R-UT) have made clear tax increases are going nowhere in Congress.

The ensuing debate will be all about progressive "Robin Hood" economics versus supply-side "trickle down" economics. With the vast majority of the income gains in the 21st century going to the wealthy, numerous Republicans have also started talking about the need to tackle inequality. Their challenge is to come up with competing ideas which match their rhetoric.

Solid Economic Gains Give Obama Good Reason To Crow


Obama's seventh State of the Union comes amidst the strongest economy of his presidency. The unemployment rate has dropped to 5.6 percent, gas prices have plummeted, and economic optimism appears to be on the rise. For Obama, that's an opportunity to claim credit for his economic policies, which have faced severe scrutiny and criticism as the United States has sought to recover from the worst economic downturn since the Great Depression.

Of course, any bragging will be tempered by the fact that middle class wages remain flat.

State of the Union Addresses Rarely Have A Big Impact


For all the fanfare and the tens of millions of Americans who typically watch the speech, State of the Union address rarely makes a dent in public opinion polls.

The Washington Post reported in 2013:

Rarely have State of the Union addresses moved public opinion, and rarely have they led to the kind of broad legislative accomplishments that presidents propose. For all the ritual and attention surrounding these speeches, the State of the Union is, well, sort of lame.

Nor do State of the Union speeches change presidential approval. In 2010, Gallup reviewed surveys dating back decades to the Jimmy Carter era and found that "these speeches rarely affect a president's public standing in a meaningful way, despite the amount of attention they receive." The one exception was Bill Clinton, who enjoyed a 3 percent boost on average.

Who's Giving The GOP Response?


The official Republican rebuttal will be delivered by newly elected Iowa Sen. Joni Ernst, who has enjoyed a meteoric rise in the last year. The 44-year-old freshman was a first-term state legislator just weeks ago and had an unusual surge to prominence in the 2014 campaign — which began after she released an ad about her childhood experiences castrating farm animals.