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Tax the rich, demands Obama

world Updated: Jan 26, 2012 00:00 IST

US President Barack Obama used his last State of the Union speech before the November election to paint himself as the champion of the middle class, by demanding higher taxes for millionaires and tight reins on Wall Street.



Taking advantage of the huge national platform of his annual speech to Congress, Obama defiantly defended his record after three years in office and laid blame for many of the country’s woes at the feet of banks and an out-of-touch Congress.

He proposed sweeping changes in the tax code and new remedies for the US housing ­crisis as he made the case for reducing income inequality in America.

While the biggest proposals in Obama’s election-year speech are considered unlikely to gain traction in a divided Congress, the White House believes the president can tap into voters’ resentment over the financial industry’s abuses and Washington’s dysfunction.

But even as he called for a “return to American values of fair play and shared responsibility,” Obama seemed to take no blame on himself for a fragile economy and high unemployment that could trip up his re-election bid.

Instead he launched a highly partisan attack over taxes, the most divisive issue at the heart of this year’s presidential campaign, and said: “I will not go back to the days when Wall Street was allowed to play by its own set of rules.”

“Washington should stop subsiding millionaires,” Obama declared as he proposed a minimum 30% effective tax rate on those who earn a million dollars or more. Obama’s message could resonate in the 2012 campaign following the release of tax records by Mitt Romney, a potential Republican rival and one of the wealthiest men ever to run for the White House. He pays a lower effective tax rate than many top wage-earners.

A new proposal outlined by Obama to ease the way for more American homeowners to get mortgage relief — and to pay for the plan with a fee on banks blamed for helping create the housing crisis — also struck a populist note.