A good fight
So the really big fight 鈥� perhaps the defining battle of 2012 鈥� won鈥檛 be over Medicare. It won鈥檛 even be over Obama鈥檚 jobs program.
It will be over whether the rich should pay more taxes.
The President has vowed to veto any plan to tame the debt that doesn鈥檛 increase taxes on the rich. The Republicans have vowed to oppose any tax increases on the rich.
It鈥檚 a good fight to have.
In a Rose Garden ceremony Monday, Obama proposed new taxes on the wealthy 鈥� 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 鈥渃lass warfare.鈥� But it鈥檚 not warfare to demand the rich pay their fair share of taxes to bring down America鈥檚 long-term debt.
After all, the richest 1 percent of Americans now takes home more than 20 percent of total income. That鈥檚 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 鈥� half the rate they paid on ordinary income prior to 1981.
(Unfortunately, the President isn鈥檛 proposing to raise the capital-gains tax 鈥� which, now at 15 percent, creates a loophole large enough for the super-rich to drive their Ferrari鈥檚 through. About 80 percent of the income of America鈥檚 richest 400 comes in the form of capital gains. Here鈥檚 where billionaire hedge-fund and private-equity fund managers make out like bandits. As I鈥檝e noted, I also wish he aimed higher 鈥� for more brackets and higher rates at the very top. But at least he鈥檚 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 doesn鈥檛 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 鈥� given projected budget deficits 鈥� if the rich don鈥檛 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 anyone鈥檚 declared class warfare it鈥檚 the people who inhabit the top rungs of big corporations and Wall Street (and who comprise a disproportionate number of America鈥檚 super rich). They鈥檝e declared it on average workers.
The ratio of corporate profits to wages is higher than it鈥檚 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.
You鈥檝e 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 it鈥檚 firing 30,000 workers.
Maybe I鈥檓 old-fashioned, but the way I see it we鈥檝e 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 don鈥檛 have to sacrifice quite as much.
According to the polls, most Americans agree.
