SOTU – signs that transformation is finally on the way

Last night’s speech offered a realistic and encouraging vision of the future. It was delivered in a statesmanlike tone, was partisan in the best sense of the term – substantive, specific, based on conviction – yet its delivery addressed its primary opponent in a pointedly respectful, exemplary fashion.

On substance, it was also a serious speech.

Anchored upon one Big Idea, tax reform based on a flattened tax code – i.e. a decipherable, transparent tax system that’s harder to exploit, avoid or lobby – this speech took the initiative in shaping the urgently overdue conversation American politics is failing to have: How can America fund its future in a way that is fair to all, shares benefits among all but also demands sacrifice from all?

A flattened tax code is an argument with many flaws but it’s at least an argument, particularly in this era of perfectly rational left and right wing popular anger, that offers a new and workable response to core fiscal and even core legitimacy questions.

This was a leader’s speech.

It’s a shame then, at least for this Obama supporter, that it was delivered by Mitch Daniels as a rebuttal to President Obama’s STOU.

In contrast, President Obama’s State of the Union speech was designed to induce supporters like this one into reacting like a kid who in the run-up to Christmas morning, receives a letter of intent from Santa; a promise that all the goodies are available but we need to bill the rich neighbour’s tab.

Liberals and progressives may disagree; of course – they’ll argue – the 2012 SOTU was an election year speech written by focus groups for (progressive) lobby groups. Isn’t this reasonable and rational?

Yes – if your name is President Hillary Clinton and your base is heavily dependent on the working poor and middle class. And you actually believe that the problem with a rigged tax code is less the rigging and more the beneficiaries.

But this was President Obama’s SOTU. Hillary Clinton was defeated, was she not, by the promise – and promises – of the self-styled Transformation President?

Obama may have little to fear from nominee Gingrich and clearly this speech was designed to hobble the poster star of the One Percenters: Mr 13%, Mitt Romney. But when the transformative rhetoric – and substance – is coming from the GOP’s Mitch Daniels it’s a bit, well, disappointing.

But, at least long term, there’s reason to be encouraged too. Roll on 2016.

  • pauluk

    What a load of waffle. It was a re-hash of old stumps speeches without anything substantially new.

    Check out the similarities from his 2010 and 2011 speeches. Boooring!

  • Dread Cthulhu


    When you can’t even get AP to roll with you, you’re presidency is in serious trouble…

  • Dread Cthulhu

    “your presidency,” even… *sigh*

  • Mick Fealty

    Have you two read the post properly. That is to the end?

  • Dread Cthulhu

    Yes, Mick… just guilty of piling on…

  • pauluk

    Guilty of ambiguity! The ‘waffle’ refers to Obama, not Ruarai.

    My bad!

  • New Yorker

    Obama delivered a very good State of the Union. I don’t recall him saying anything about the flat tax concept. What did make an impression was that a minimum of 30% tax for income of $1million+. Warren Buffett, Bill Gates and Michael Bloomberg all agree it is fair and should be done. Gates and Bloomberg are highly respected for their business acumen and created many thousands of jobs; so the argument that higher taxes on the rich would discourage creation of jobs is once again proved to be hogwash. Michael Bloomberg paid 35% tax and the company he founded employs over 15,000. Mitt Romney paid 13.9% and created no jobs. The tide is with Obama on this proposal.

    There are more and more good economic developments. But the debt head Mitch Daniels drones on and on displaying how depressing he and his party are. I’ll take optimism over depression every time, and so will most US voters.

  • Romney’s tax bill was based mostly on ‘capital gains’ income, not salary. If you remove capital gains tax and introduce flat tax you are presuming that people will continue to invest and take the ‘risk’ of investment with the gain of lower tax – though locking up your capital – when you have been taxed already on the capital accrued. If capital tax remains then you would be paying tax on money you had already been taxed on, while not having access to your capital – why would you do that? Have Bloomberg and Romney a like for like income profile. Probably not.

  • pauluk

    High taxes have chased many investors and businesses from New York and California. Guess where they went: to lower tax states like Texas, which has seen a huge increase in investment and business growth in recent years.

    Taking more tax from the rich will only force them to move their capital to safer climates. It will be a Pyrrhic victory for the faux class warriors. Ironically, tax increases will hit Democrats harder than Republicans. Believe it or not, on average, Democrats are richer! So it’s really only a political game Obama is playing.

    If Romney could do for America what he has done for himself, through wise choices and hard work, then he would make a brilliant president and could help America regain some of its greatness.

    On the other hand, if Obama retains power, he will continue to push his failed economic policies, to the severe detriment of the US.

  • pauluk

    Just read this , illuminating article by Janet Daly in the Telegraph. Smoke and Mirrors – ‘a semantic trick’ as Daly calls it – on taxes are an Obama/Clegg specialty.

    Downright deceptive and misleading might by another way to refer to it.

  • pauluk

    This is hilarious, Obama lectures people on taxes while his White House staff owe over $830,000 in back taxes. What hypocrisy!

  • Dread Cthulhu

    C’mon, PaulUK — do you really need to be surprised — the IRS is run by Timmy the Tax Cheat Geithner…