Listening to President Biden’s recent State of the Union speech and the tax policies he proposed, we decided to review some past SotU speeches from Presidents and see what tax policy references were made. Also of note is what congress looked like and what possible tax laws came out of it. Here are some highlights of our research. Note we have no political affiliation with this list and all items are factual to the extent we have researched. If you see an error please provide a correction in the comments.
“No Double Taxation”
President George W. Bush (R) in his 2003 State of the Union called for the elimination of the “double taxation” of dividends, which he argued would stimulate economic growth. With the Republican-controlled House and Senate, the Jobs and Growth Tax Relief Reconciliation Act of 2003 was passed which reduced the tax on dividends.
“New workers” “Raise Wages” for small businesses
President Barack Obama (D) in his 2010 State of the Union proposed a “Small Business Jobs Act” to provide tax cuts for small businesses. He called for a partial extension of the Bush-era tax cuts and plans to eliminate tax breaks for companies that move jobs overseas. The Democrat-controlled House and Senate passed the Small Business Jobs Act of 2010, which provided tax incentives for small businesses and focused on companies that created jobs in the US.
“Elimination of the death tax”
President Donald J. Trump (R) in his 2018 State of the Union called for the “elimination of the death tax” and a reduction of taxes on middle-class families and small businesses. The Republican-controlled House and Senate passed the Tax Cuts and Jobs Act of 2017, which included a reduction in the estate tax and a reduction of individual income tax rates.
“Increase corporate tax to pay a fair share”
President Joe Biden (D) 2021 State of the Union called for an increase in the corporate tax rate to 28% to fund infrastructure and education initiatives. Biden’s proposed American Jobs Plan included an increase in the corporate tax rate but was never passed. The plan’s infrastructure goals were inserted into the Infrastructure Investment and Jobs Act, which was signed into law in November 2021. Other items (e.g., climate change remediation, home health care reform, etc.) were inserted into the Build Back Better Act and Inflation Reduction Act of 2022.
“Middle-class bill of rights”
President Bill Clinton (D) 1993 State of the Union proposed a tax hike on the top 1.2% of income earners to reduce the federal deficit. The Democrat-controlled House and Senate passed the Omnibus Budget Reconciliation Act of 1993, which included a tax increase on the top 1.2% of income earners.
“Reduce the capital gains tax”
President George H.W. Bush (R) 1990 State of the Union called for a reduction in the capital gains tax rate to stimulate economic growth. The Republican-controlled House and Democrat-Controlled Senate passed the Budget Reconciliation Act of 1990, which included a reduction in the capital gains tax rate.
“Simplify tax code – No marriage penalty”
President Ronald Reagan (R) 1986 State of the Union called for comprehensive tax reform, including a reduction in marginal tax rates, abolish the marriage penalty, and the elimination of tax loopholes. The Democrat-controlled House and Republican-controlled Senate passed the Tax Reform Act of 1986, which included a reduction in marginal tax rates and the elimination of tax loopholes.
“deficit in our budget…greater deficit in our economy”
President Ronald Reagan (R) 1981 gave his “Address Before a Joint Session of the Congress on the Program for Economic Recovery” proposing reforming the tax code and drastically reducing marginal tax rates. The Democrat-controlled House and Republican-controlled Senate passed the Economic Recovery Tax Act of 1981, which reduced the marginal tax rates and made other significant changes to the tax code.
“Tax Surcharge”
President Lyndon B. Johnson (D) 1965 State of the Union he proposed a tax surcharge to pay for the “War on Poverty” and the Vietnam War. The Democrat-controlled House and Senate passed the Tax Adjustment Act of 1965, which included a 6 percent tax surcharge on personal and corporate income taxes to help finance the Vietnam War for the next two years, or “for as long as the unusual expenditures associated with our efforts continue.”
“Death Tax”
President George W. Bush (R) 2007 State of the Union proposed making his 2001 and 2003 tax cuts permanent and increasing the size of certain tax credits. He also called for a reduction in the number of tax brackets, simplification of the tax code, tax reduction for health insurance, and an end to the “death tax.” A democrat-controlled Congress did not pass legislation for any of the proposed items though some were extended by a few years.
As we did more research, we noticed SotU speeches keep getting longer and with a partisan feel. Where it should be a report to Congress, it seems more like a show on TV for the American public. From reading the comments on this year’s speech, it seems like we are not alone in this feeling.
We have thought about doing a year-by-year comparison. Let us know if there is interest in reading more.