President Barack Obama, in his recent State of the Union speech, presented policy, foresight, and spirit. The State of the Union is the annual address presented by the President of the United States to the United States Congress, which outlines policy-prescription, agenda, and more importantly, conditions of the state. According to article two, section three of the Constitution, the president shall address Congress from time to time and recommend to their consideration measures that he feels necessary.

The State of the Union is one of the most keenly watched political events in the U.S. Even though the Constitution never explicitly announced the regularity of its presentation, it is delivered on an annual basis. This was the third time President Obama gave the State of the Union address.

This time, the state of the economy, and the disequilibrium within, were the main highlights of the speech, wherein tax reforms, education, energy, unemployment, tax-breaks, and foreign policy issues were pitched.

Nonetheless, the solution to these issues remain daunting since the rate of employment is less than attractive and nowhere near what was envisaged when Obama took office. President Obama said that in the last 22 months, businesses have created more than three million jobs. But a recap of the statistics supporting the facts shows that the President was off the numbers when he spoke. 

According to the Bureau of Labor statistics, 2.056 million jobs have been added in the economy over 21 months during his presidency. Ultimately, the White House stated that Obama was referring to private sector jobs, not government jobs but whichever the connection, the overall truth is that the American economy is not out of the woods yet.

In his catalog of policy prescriptions, the president was cautious over the state of Americans, as widening gaps between rich and poor has entered the mainstream politics and could hold a strong baring in the outcome of the presidential elections this year. Growing income inequality and job insecurity will be the key elements that need to be addressed in order to win office and the Democrats are currently relying on the Buffet Rule, a plan which would tax millionaires at a minimum of 30 percent.

The real escape lies in and around the net of tax reforms since multiple factors are responsible for this ill distribution. More importantly, in recent years, shrinking incomes and declining employment at a massive scale are at the helm of economic inequality.

President Obama praised the American armed forces for their courage and selflessness that led to the elimination of the world’s most perilous threat hiding in Pakistan in early 2011. This is second in line of the remarkable achievements under President Obama, following efforts to stabilize the economy.

Both of these issues show initial hope and optimism. However, with regards to economy, the trend of optimism appears to be fading. However, in the heat of the presidential race, it will in the end be a trial and error game that depends on the American voter’s ability to swallow the proposed solutions.

Republicans accused Obama of promoting class warfare and wealth-envy in his address. According to Indiana Governor Mitch Daniels, “No feature of the Obama presidency has been sadder than its constant efforts to divide us.” Indeed, it looks to be a tough battle ahead for administrative supremacy between democrats and republicans.

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Mitt Romney has been, and continues to be, the candidate to beat for the Republican nomination. He has come under fire from every other nomination contender, as well as from the Obama campaign on the left. He is criticized for being “out of touch” with the middle class, as well as for shutting down companies and eliminating jobs under Bain Capital, the private equity firm which he used to run.

His fortune, which is somewhere between 190 million and 250 million, makes him one of the wealthiest men to run for office in recent times. He has described the amount that he made from speaking engagements as “Not very much.” This amount is revealed to be $374,327, an amount that, well into the six figures, is far higher than the income of the average American.

Criticized by opponents for not releasing his tax forms, Romney is beginning to succumb, admitting to paying somewhere near 15% in his taxes. This percentage means that most of Romney’s income is from investments, as opposed to from ordinary income, which is taxable by up to 35%.

This makes him one of the 200,000 millionaires who pay less in taxes than the average person who makes over 100,000 dollars a year. According to the Christian Science Monitor, if some of his Republican opponents had their way, Mr. Romney would be paying even less in taxes.

Coincidentally, Mitt Romney opposes the Buffett Rule, also known as the Millionaire’s Tax, which would increase the minimum tax rate paid by millionaires, ensuring that they pay at least the same percentage that middle class income families do. According to the New York Times, any time he is asked about taxes being raised on the wealthy, Romney deflects the question, insisting that the size of our government must be shrunk.

The bigger issue may be that the IRS values investments more than it does ordinary income. Regardless, the current tax rates make it so that those who make many times over the average income, such as Mr. Romney,  have to pay a much lower percentage in taxes than a middle class family.

Furthermore, Mr. Romney negotiated a retirement deal with Bain Capital that provides him with a substantial share every year. This will be even more income that will not fall under ordinary income, and so therefore only 15% percent will be subject to taxation. As a candidate, Romney has advocated policies that would continue to benefit people like him whose income comes mainly from investments.

Mr. Romney will perhaps be continued to be seen as out of touch, and these recent revelations will doubtlessly be unhelpful to his candidacy.

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