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capital gains taxIt is no secret that Congress is home to some of the wealthiest Americans. The average salary of a congressional member is $174,000 annually, and about 200 members are multimillionaires. Their salary alone puts every congressional member in the top 6 percent of earners in the U.S.

The vast majority of congressional members come from upper-middle class families, where connections to senior political members and other social and religious groups are plentiful.

In his State of the Union address, President Barack Obama addressed higher taxes on the wealthy, which are unpopular and unlikely to pass in Congress. His increase is substantial — raising it from 23.8 to 28 percent on couples making over $500,000. This bill in particular received backlash from Republicans.

“Taxes on capital income, such as the capital gains tax, are among the worst ways to raise revenue from the perspective of economic growth,” said Greg Mankiw, professor of economics at Harvard University.

Tax credits would go toward the middle class and the increase in taxes would raise around $200 billion in the next decade.

Former Rep. Tom Perriello wrote, “During the 2010 lame-duck session, Congress passed an $858 billion tax-cut extension, leaving in place generous [Bush-era] tax breaks for the wealthiest Americans. Why was such an opportunity to address inequality and spur economic growth via our tax code missed? … Most of those who prevented the bill from getting a vote before the election privately argued that the income threshold was too low.”

President Obama recently released a plan for a new tax strategy that would affect the rate of the capital gains tax and close lucrative loopholes that avoid the capital gains tax. In addition, he is proposing to close a loophole that allows heirs to avoid paying taxes on large estates.

The economy has recovered since the economic crisis of 2008, and much of this is due to Obama’s financial politics of raising taxes on the high-income earners in America. These tax increases do benefit the middle class by approximately $320 billion in tax credits that would be allotted.

The tax credits will go toward expanding higher education and providing greater support for child care. In addition, they provide substantial assistance to families in the middle-income classes. They provide about $500 for married couples to curb the cost of child care for working-class Americans.

– Maxine Gordon

Sources: NPR, The Atlantic, The Washington Post, Yahoo News

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President Obama mentioned poverty three times in his 2014 State of the Union Address.

“Americans overwhelmingly agree that no one who works full time should ever have to raise a family in poverty.”

The two largest retailers in the world are Costco and Wal-Mart. Costco employees make more than $20 per hour, while Wal-Mart employees make about $12 per hour. Many Wal-Mart employees still live below the poverty line. When customers come in and spend more than an employee might make in a week, it doesn’t create a good environment for employee morale or happiness.

“In the coming weeks, I will issue an Executive Order requiring federal contractors to pay their federally-funded employees a fair wage of at least $10.10 an hour – because if you cook our troops’ meals or wash their dishes, you shouldn’t have to live in poverty.”

Obama also mentioned the profitability of Costco’s operation and urges other corporations to follow Costco’s example. With a company turnover rate of five percent among employees who have been at Costco for more than a year, and less than one percent among executives, the company is surely doing something right.

Obama says that Congress needs to get on board in order to increase the minimum wage, which is worth about 20 percent less today than it was in the 1980s.

“Across Africa, we’re bringing together businesses and governments to double access to electricity and help end extreme poverty.” Obama’s Young African Leaders Initiative strives to engage the next generation of leaders and strengthen partnerships between the U.S. and Africa.

Through this program, the U.S. has invested significant resources to enhance leadership and entrepreneurship in Africa. It has also invested financial resources, through USAID, to strengthen access to education, workforce training and skills development for young Africans entering the labor force. USAID has invested more than $100 million to help train the new generation of African leaders.

Haley Sklut

Sources: USA Today, Bloomberg Businessweek
Photo: Forbes

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United States President Barack Obama mentioned extreme poverty during the State of the Union address on January 28 while explaining that America’s leadership is in a better position than any other country to help the world.

The president said that the leadership of the U.S. is defined “by the enormous opportunities to do good and promote understanding around the globe – to forge greater cooperation, to expand new markets, [and] to free people from fear and want.”

Obama made these references roughly one hour into the State of the Union address when discussing his administration’s stance on foreign policy. He said that his administration is proud of the diplomatic relations between the U.S. and Iran and that he would not hesitate to use his power to protect America in case anything went wrong.

Although the U.S. is responsible for maintaining order and spreading democracy, according to Obama, the U.S. is also responsible when it comes to helping those in need.

“Across Africa, we’re bringing together business and governments to double access to electricity and help end extreme poverty,” said Obama.

But what exactly does this mean? Obama referred to is a USAID program named “Power Africa.”

USAID describes Power Africa as “a U.S. Government initiative that addresses one of the most pressing challenges to sustainable economic growth and development in sub-Saharan Africa – access to electrical power.” Obama announced this program during a visit to South Africa in 2013.

Under the program, the U.S. seeks to cooperate with African governments, the private sector, and international institutions such as the World Bank in order to “add more than 10,000 megawatts (MW) of clean, efficient electricity generation capacity.”

Obama also mentioned extreme poverty in last year’s State of the Union address. He said the U.S. would work to eliminate it within the next 20 years, according to an article by Think Progress.

Although Obama mentioned extreme poverty two years in a row, the contemporary U.S. Congress remains divided on many issues. Citizens may call their congressmen to help Capitol Hill unify and tackle the issue of poverty as well.

– Juan Campos

Sources: CBS News, Think Progress, USAID
Photo: Politico

Investing in the Future with Universal Pre-KIn his State of the Union address, President Obama called for action on something just as unprecedented as universal healthcare in America – universal preschool.

The White House has released an infographic sharing that at-risk children who do not receive a high-quality early education are 25 percent more likely to drop out of school, 40 percent more likely to become a teen parent, 50 percent more likely to be placed in special education, 60 percent more likely to never attend college and 70 percent more likely to be arrested for a violent crime.

The investment in preschools, therefore, means investing in the future of American life, according to an administration that has championed demands that every child one day receive an affordable college education, and who has also called for sharp restrictions to be placed on assault weapons as a result of increasingly sensationalized acts of gun violence.

The investment in early education may raise a generation out of poverty, as current reports claim that the United States provides, at the moment, some of the least access to the social mobility of the world’s utmost developed nation. This has proven disheartening to a society that functions on the ideals of the American Dream, which is that anyone can achieve anything if they work hard enough.

Investing in the future is a principle that is both bipartisan and essential to the capitalist identity of America. We can only hope that legislators can overcome their differences to invest in this preventative social program, as has been done in the states of Georgia and Oklahoma.

– Nina Narang

Sources: The Huffington Post, The Washington Post
Photo: Post University