Wednesday, March 23, 2011

Political opportunity for the wealthy to support higher federal income taxes on multi-millionaires

This is a great opportunity for wealthy Americans to build support for a middle class country.

The middle class is shrinking as the wealthy, particularly the very wealthy, are getting increasingly richer.

We don't tax high incomes much at all. The consequence of relatively low tax rate on high income when most of the income growth is for the very rich is that governments are broke. And when governments are broke, the investments that make a middle class and allow for upward mobility (good public education, health care, public sector jobs) wither, shrinking the middle class with it.

Most public school districts are firing teachers this year.

Most states are firing social workers who take care of disabled people or people with drug addictions.

Most public transportation districts are raising fares and cutting back on service.

Most public colleges are raising tuition and cutting classes.

This takes money out of the pockets of the middle class and makes us poorer.

The best way to fix this is to raise taxes on people who are making millions of dollars and use that money to make public transportation more affordable, keep public libraries open longer, hire more teachers in the public schools and dozens of other state and local government investments that make the middle class better off.

But right now, in the face of united Republican opposition to raising taxes on wealthy people, Washington has taken high income tax cuts off the table for the next 18 months.

This month, several U.S. Representatives just put higher taxes for millionaires and billionaires to pay for a middle class back on the table.

Here is a video of Illinois Representative Jan Schakowsky talking about why the wealthiest Americans should pay more for the good of their country.

This is a great opportunity for some progressive wealthy people to define the debate on tax fairness for the next year.

When wealthy people make the point that those who earn more than ten million dollars a year can afford to pay a higher tax rate on the income above $300,000, it is uniquely compelling, because the faint aura of class envy doesn't exist as when a poorer person makes the same point.

Plus, the notion of solidarity, so central to a stronger consensus on the necessary taxpayer investment in our economic growth, is engendered when the wealthy who will pay more call for a higher tax rate on high incomes in order to benefit other Americans.

As the Senate Democrats and House Republicans in Washington march towards an inevitable budget clash this spring, a stronger call by wealthy Americans to raise more revenue from the people who are enjoying their best years and can thus afford higher taxes would resonate. This call should especially be directed in a campaign to purple parts of the country to help shape popular perception of whether the Bush tax cuts should be repealed in 2013, as President Obama will campaign for in his re-election effort and the Republica nominee will campaign against. The more we can convince Americans in swing states to embrace higher taxes for high incomes, the better the electoral terrain for President Obama and the Democratic Party 19 months from now.

We can't expect President Obama to convince the nation on his own to do the right thing. Wealthy Americans who understand the economic and moral imperative of fair taxes on high income have an opportunity and obligation to convince millions of Americans in 2011 to support the policy, both to help win the budget battle this year and to win the federal election in 2012.

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