The president has the wealth gap on his mind.
Obama identified the need for a level economic playing field as “the defining issue of our time” in his State of the Union address Tuesday night, according to early excerpts of his speech made available to the press.
“No challenge is more urgent. No debate is more important,” the president said. “We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”
Obama delivered his address after decades of divergence between America’s richest citizens and everybody else. A Congressional Budget Office report recently confirmed that the gap separating the wealthiest and poorest Americans is historically large, and that the nation’s top earners have seen their incomes skyrocket in the past 30 years while paychecks for the vast majority of people have barely changed at all.
The address also took place amidst a grim season for the American economy, a time when millions of people are out of work, and millions more have jobs that don’t pay enough to boost them out of poverty.
Presently, income inequality is more severe in the U.S. than almost anywhere else in the developed world — a circumstance likely related to the country’s pervasive levels of poverty and economic struggle.
In confronting the dearth of economic opportunities for ordinary workers, Obama seems to be echoing — whether intentionally or unintentionally — the concerns of the Occupy movement, which cast a spotlight this autumn on the national wealth gap and the harsh conditions faced by those looking for jobs. In evidence of how thoroughly the Occupy movement saturated the national conversation, the number of times the media mentioned the phrase “income inequality” increased nearly five-fold during the first two months of the Occupy protests, according to Politico.
The president is also likely playing into Americans’ concerns about the issue. Nearly three-quarters of Americans said that they think income inequality is a problem for the United States, according to an October poll conducted by The Hill. More generally,countless polls in recent months have shown that the economy and the availability of jibs are the top concerns for Americans.
Evidence suggests that the income gap may be holding back a broader economic recovery, which has yet to manifest despite the Great Recession officially ending in 2009. Income equality positively correlates with economic growth, according to a September study from the International Monetary Fund.
In the hours leading up to Tuesday night’s address, onlookers raised their eyebrows at the news that Debbie Bosanek, secretary of billionaire financier and occasional Obama adviser Warren Buffett, will receive a seat of honor next to Michelle Obama during the proceedings.
Buffett made headlines over the summer when he argued, in a widely read New York Times op-ed, that America’s very wealthiest citizens should pay higher tax rates than many of them currently do. Buffett cited the example of his office co-workers, who he said paid a higher percentage of their income as taxes despite earning much less than him.
A report earlier this month from the Congressional Research Service pointed to regressive alterations in the tax code — that is, high earners paying smaller and smaller shares — as one of the major reasons for the differences in income growth during those years. The report found thatbetween 1996 and 2006, the top 0.1 percent of tax filers experienced an almost two-fold increase in income, while the bottom 20 percent of filers saw their incomes fall by 6 percent.