The President's modest proposals to raise taxes on the rich -- limiting their tax deductions, ending the Bush tax cut for incomes over $250,000, and making sure the rich pay at the same rate as average Americans -- don't come close to paying for what American families need.
Marginal tax rates should be raised at the top, and more tax brackets should be added for incomes over $500,000, over $1,500,000, over $5 million. The capital gains tax should be as high as that on ordinary income.
Wealth over $7.2 million should be subject to a 2 percent surtax. After all, the top one half of 1 percent now owns over 28 percent of the nation's total wealth. Such a tax on them would yield $70 billion a year. According to an analysis by Yale's Bruce Ackerman and Anne Alstott, that would generate at least half of $1.5 trillion deficit-reduction target over ten years set for the supercommittee.
Another way to raise money would be through a tiny tax (one-half of one percent) tax on financial transactions. This would generate $200 billion a year, and hardly disturb Wall Street's casino at all. (The European Commission is about to unveil such a tax there.)
All this can be done, but only if Americans understand what's really at stake here.
When Republicans recently charged the President with promoting "class warfare," he answered it was "just math." But it's more than math. It's a matter of morality.
Republicans have posed the deepest moral question of any society: whether we're all in it together. Their answer is we're not.
President Obama should proclaim, loudly and clearly, we are.
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