A good fight(Read article summary)
Obama's fight against tax cuts for the wealthy is a worthy cause.
Pablo Martinez Monsivais/AP
It will be over whether the rich should pay more taxes.
The President has vowed to veto any plan to tame the debt that doesnâ€™t increase taxes on the rich. The Republicans have vowed to oppose any tax increases on the rich.
Itâ€™s a good fight to have.
In a Rose Garden ceremony Monday, Obama proposed new taxes on the wealthy â€” including a special new tax for millionaires, the closing of loopholes and deductions for people making more than $250,000 a year, and an end to the portion of the Bush tax cut going to higher incomes.
Republicans accuse the President of instigating â€śclass warfare.â€ť But itâ€™s not warfare to demand the rich pay their fair share of taxes to bring down Americaâ€™s long-term debt.
After all, the richest 1 percent of Americans now takes home more than 20 percent of total income. Thatâ€™s the highest share going to the top 1 percent in almost 90 years.
And they now pay at the lowest tax rates in half a century â€” half the rate they paid on ordinary income prior to 1981.
(Unfortunately, the President isnâ€™t proposing to raise the capital-gains tax â€” which, now at 15 percent, creates a loophole large enough for the super-rich to drive their Ferrariâ€™s through. About 80 percent of the income of Americaâ€™s richest 400 comes in the form of capital gains. Hereâ€™s where billionaire hedge-fund and private-equity fund managers make out like bandits. As Iâ€™ve noted, I also wish he aimed higher â€” for more brackets and higher rates at the very top. But at least heâ€™s drawn a line in the sand. The veto message is clear.)
Anyone who says the American economy suffers when the rich pay more in taxes doesnâ€™t know history. We grew faster the first three decades after World War II than we have since.
Trickle-down economics has been a cruel joke.
On the other hand â€” given projected budget deficits â€” if the rich donâ€™t pay their fair share, the rest of us will have to bear more of a burden. And that burden inevitably will come in the form of either higher taxes or fewer public services.
If anyoneâ€™s declared class warfare itâ€™s the people who inhabit the top rungs of big corporations and Wall Street (and who comprise a disproportionate number of Americaâ€™s super rich). Theyâ€™ve declared it on average workers.
The ratio of corporate profits to wages is higher than itâ€™s been since before the Great Depression. And even as corporate salaries and perks keep rising, the median wage keeping dropping, and jobs continue to be shed.
Youâ€™ve got the chairman of Merck taking home $17.9 million last year. This year Merck announces plans to boot 13,000 workers. The CEO of Bank of America takes in $10 million, and the bank announces itâ€™s firing 30,000 workers.
Maybe Iâ€™m old-fashioned, but the way I see it weâ€™ve got a huge budget deficit and a giant jobs problem. And under these circumstances it seems to me people at the top who have never had it so good should sacrifice a bit more, so the rest of us donâ€™t have to sacrifice quite as much.
According to the polls, most Americans agree.