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