Inequality

With the newly elected Republican Congress and continuing unemployment, we are going to see a rise in blaming unions -- especially public employee unions, including teachers -- for having jobs and pensions.

And yet see Nicholas Kristof's reminder in today's New York Times -- 1 percent of Americans own more wealth than the bottom 90 percent. And we have just passed a huge tax cut for the wealthiest Americans. Of course, even to say this is to move from one blame rhetoric to another. We're in for more lean times, and more mean times.

Nicholas Kristof, "Equality, a True Soul Food," New York Times, 2 January 2011.

Robert Reich on the Tax Deal

Robert Reich, "Why the Obama Tax Deal Confirms the Republican World View," Huffington Post, December 8, 2010.

Here's the real story. For three decades, an increasing share of the benefits of economic growth have gone to the top 1 percent. Thirty years ago, the top got 9 percent of total income. Now they take in almost a quarter. Meanwhile, the earnings of the typical worker have barely budged.

The vast middle class no longer has the purchasing power to keep the economy going. (The rich spend a much lower portion of their incomes.) The crisis was averted before now only because middle-class families found ways to keep spending more than they took in -- by women going into paid work, by working longer hours, and finally by using their homes as collateral to borrow. But when the housing bubble burst, the game was up.

The solution is to reorganize the economy so the benefits of growth are more widely shared. Exempt the first $20,000 of income from payroll taxes, and apply payroll taxes to incomes over $250,000. Extend Medicare to all. Extend the Earned Income Tax Credit all the way up through families earning $50,000. Make higher education free to families that now can't afford it. Rehire teachers. Repair and rebuild our infrastructure. Create a new WPA to put the unemployed back to work.

Pay for this by raising marginal income taxes on millionaires (under Eisenhower, the highest marginal rate was 91 percent, and the economy flourished). . . .

Are Your Taxes Too High?

What ever happened to the rhetorical presidency?

Frank Rich in the New York Times:

Obama should have pounded home the case against profligate tax cuts for the wealthiest before the Democrats lost the Senate. Even now Warren Buffett — not a socialist, by the way — is making the case with a Christie-esque directness that usually eludes the president. “The rich are always going to say that, you know, just give us more money and we’ll all go out and spend more, and then it will trickle down to the rest of you,” he told Christiane Amanpour on “This Week” last Sunday. “But that has not worked the last 10 years, and I hope the American public is catching on.” . . .

Frank Rich, "All the President's Captors," New York Times, 5 December 2010.

Roger, Just Pay the Two Dollars

A recent reminder from MoveOn.org about the Obama administration tax plan:

This is ridiculous. The media has been obsessing about President Obama's plan to roll back the Bush tax cuts for the wealthiest Americans—from 35% to 39.6%—even asking if that makes him a socialist.

But do you know what tax rate the wealthiest Americans paid on the top portion of their earnings at the end of Ronald Reagan's first term? 50%.

Under Richard Nixon? 70%. Under Dwight Eisenhower? 91%!

Shocking, right?

And for all the whining about rolling back Bush's irresponsible tax cuts, the truth is that Obama's plan cuts taxes for 95% of working Americans. Further, it closes huge tax loopholes for oil companies, hedge funds and corporations that ship jobs overseas so that we can invest in the priorities that will get our economy back on track.

We saw a great chart in The Washington Monthly that shows just how absurd Republican complaints about Obama's budget are. . . .

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