During his annual State of the Union address on February 12, President Barack Obama launched the agenda for his second-term administration. The president covered a wide range of topics, but, as expected, he delved heavily into matters related to the national economy. After discussing a spate of new jobs initiatives and a desire to encourage domestic manufacturing, President Obama turned to a topic that many Congressional Republications are loathe to discuss in the wake of the fiscal cliff deal: taxes.
“Now is our best chance for bipartisan, comprehensive tax reform that encourages job creation and helps bring down the deficit,” the president stated firmly. He added that rules needed to be put in place that prevent “billionaires with high-profile accountants” from reaping an unbalanced amount of benefits each year during tax season.
Unfortunately, the president was short on details or proposals as to how this tax code simplification would be achieved in the near term. During the 2012 campaign, President Obama championed limiting deductions and allowing investment incomes to be taxed higher. This statement comes at the beginning of a weeks-long hurdle toward the March 1 sequester date and the May expiration of the debt ceiling extension. If Republican Speaker John Boehner’s face was any indication during the State of the Union, discussions over tax reform might be complex to say the least.
This year’s address to Congress is the unofficial launch for the policy debates that are sure to lead to some interesting dialog between the two parties. As such, investors in both the American and global economies need to do all they can to stay informed and work effectively in this difficult climate. To learn more about effective wealth preservation methods, including income derived from cash flow real estate, visit GreatWealthStrategies.com today.