Submitted by Lawrence Rafferty, (rafflaw), Guest Blogger
I know what you might be thinking after reading that title, “Duh”! However, a few days ago, I read an article by former Labor Secretary Robert Reich, which proposed that the Wealthy must contribute more revenue to the government through the form of higher taxes. When I first read it, I nodded my head in agreement and moved on to another article. In light of my guest blog last week titled, The Tea Party Versus the Middle Class, and in light of the “deal” that was reached last night to keep the government from shutting down, I think it is imperative to review Mr. Reich’s words.
“Here’s the truth: The only way America can reduce the long-term budget deficit, maintain vital services, protect Social Security and Medicare, invest more in education and infrastructure, and not raise taxes on the working middle class is by raising taxes on the super rich. Even if we got rid of corporate welfare subsidies for big oil, big agriculture, and big Pharma – even if we cut back on our bloated defense budget – it wouldn’t be nearly enough.” Robert Reich When you read Nal’s excellent guest blog earlier today about the Paul Ryan Path to Prosperity, it seems obvious that the purpose of the Republican budget proposal is to grant more giveaways to the wealthy and to sock it to the Middle Class by raising taxes through Tax Bracket consolidation as Nal reported. Path To Prosperity The case has been made by that article that the Budget proposal is a hoax and will be a drain on the economy, therefore, isn’t it time for the Progressives to insist that Congress raise more revenue in the form of increasing taxes on the wealthy?
In the aforementioned and linked article, Sec. Reich lays out his reasons why the Wealthy need to and can afford to be taxed more. “The top 1 percent’s share of national income has doubled over the past three decades (from 10 percent in 1981 to well over 20 percent now). The richest one-tenth of 1 percent’s share has tripled. And they’re doing better than ever. According to a new analysis by the Wall Street Journal, total compensation and benefits at publicly-traded Wall Street banks and securities firms hit a record in 2010 — $135 billion. That’s up 5.7 percent from 2009. Yet, remarkably, taxes on the top have plummeted. From the 1940s until 1980, the top tax income tax rate on the highest earners in America was at least 70 percent. In the 1950s, it was 91 percent. Now it’s 35 percent. Even if you include deductions and credits, the rich are now paying a far lower share of their incomes in taxes than at any time since World War II. The estate tax (which only hits the top 2 percent) has also been slashed. In 2000 it was 55 percent and kicked in after $1 million. Today it’s 35 percent and kicks in at $5 million. Capital gains – comprising most of the income of the super-rich – were taxed at 35 percent in the late 1980s. They’re now taxed at 15 percent.”
Every way that you look at it, income tax, capital gains tax and the estate tax, they are all substantially lower than at any time in recent memory. In order to save necessary programs and to help the economy, additional revenue must be received from the wealthy in addition to significant cuts in corporate and defense welfare.
Obviously, what Sec. Reich is proposing is sacrilege to the Tea Party and their corporate sponsors. The idea of taking away all of these gifts to the Wealthy won’t be easy and I would expect some of the politicians on the Left to have problems with the proposal just like their brethren on the Right. The fact of the matter is that if we don’t rein in corporate welfare where is the revenue going to come from? If we don’t rein in the tax cuts for the wealthy, where is the revenue going to come from? Nal’s article showed us in graphic form the hollowness of Rep. Ryan and the Right’s claim that increased revenue will come with increased jobs, all caused by the almighty tax cuts to the rich and famous. Where have we heard that one before??
With that knowledge in hand, the only way that vital programs like Social Security and Medicare could be strengthened and saved is by increasing the revenue stream. Sec. Reich reminds us that if we would get off the fence and cut defense spending the savings would be significant. Add in a single payer health care system and the nation would save Billions. Cutting the excess in our defense budget would be a crime according to many Hawks in Congress, but their anger is usually a disguise for the pet defense projects going on in their respective districts. We can’t wait any longer to rein in those excesses.
We know that cutting the gifts to corporations and to the wealthy will go a long way in increasing economic stability, but we will never get there if the Left does not take a stand. The huge and successful Wisconsin and Ohio demonstrations against runaway State governments attacking union rights and the middle class should be a stark reminder to all of us that the power to take the country back is in our hands. The Tea Party is a small minority and look at what they have accomplished. They have sent the Democratic House and Senate into hiding and convinced a President that the change he promised was actually to make the wealthy richer and corporations more solvent. Where does the President think his votes are going to come from in 2012? Certainly not from the Right. I don’t know about you, but I think it is time for a collective Howard Beal moment!
Respectfully submitted by Lawrence Rafferty, Guest Blogger
Additional Source: Think Progress