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Robert Reich
NationofChange / Op-Ed
Published: Tuesday 30 October 2012
It would be insane to compound the damage by raising taxes on the middle class and not on the rich.

The Final Days, the Biggest Issue, and the Clearest Choice

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As we go into the final days of a dismal presidential campaign where too many issues have been fudged or eluded — and the media only want to talk about is who’s up and who’s down — the biggest issue on which the candidates have given us the clearest choice is whether the rich should pay more in taxes. 

President Obama says emphatically yes. He proposes ending the Bush tax cut for people earning more than $250,000 a year, and requiring those with high incomes to pay in taxes at least 30 percent of any income over $1 million (the so-called “Buffett Rule”).

Mitt Romney says emphatically no. He proposes cutting tax rates by 20 percent, which would reduce taxes on the rich far more than anyone else. He also wants to extend the Bush tax cut for the wealthy, and reduce or eliminate taxes on dividends and capital gains. 

Romney says he’ll close loopholes and eliminate deductions used by the rich so that their share of total taxes remains the same as it is now, although he refuses to specify what loopholes or deductions. But even if we take him at his word, under no circumstances would he increase the amount of taxes they pay. 

Obama is right. 

America faces a huge budget deficit. And just about everyone who’s looked at how to reduce it — the non-partisan Congressional Budget Office, the bi-partisan Simpson-Bowles Commission, and almost all independent economists and analysts — have come up with some combination of spending cuts and tax increases that raise revenue.

Just last Thursday, executives of more than eighty large American corporations called for tax reform that “raises revenues and reduces the deficit.”

The practical question is who pays for those additional revenues. If Romney’s view prevails and the rich don’t pay more, everyone else has to.

That’s nonsensical. The rich are far richer than they used to be, while most of the rest of us are poorer. The latest data show the top 1 percent garnering 93 percent of all the gains from the recovery so far. But median family income is 8 percent lower than it was in 2000, adjusted for inflation. 

The gap has been widening for three decades. Since 1980 the top 1 percent has doubled its share of the nation’s total income  — from 10 percent to 20 percent. The share of the top one-tenth of 1 percent has tripled. The share of the top-most one-one hundredth of 1 percent — 16,000 families — has quadrupled. The richest 400 Americans now have more wealth than the bottom 150 million of us put together.

Meanwhile, the tax rates paid by the wealthy have dropped precipitously. Before 1981 the top marginal tax rate was never lower than 70 percent. Under President Dwight Eisenhower it was 93 percent. Even after taking all the deductions and tax credits available to them, the rich paid around 54 percent. 

The top tax rate is now only 35 percent and the tax on capital gains (increases in the value of investments) is only 15 percent. Since so much of what they earn is from capital gains, many of the super-rich, like Mitt Romney himself, pay 14 percent or less. That’s a lower tax rate than many middle-class Americans pay. 

In fact, if you add up all the taxes paid — not just on income and capital gains but also payroll taxes (which don’t apply to income above incomes of $110,100), and sales taxes — most of us are paying a higher percent of our income in taxes than are those at the top. 

So how can anyone argue against raising taxes on the rich? Easy. They say it will slow the economy because the rich are “job creators.”

In the immortal words of Joe Biden, that’s malarky. 

The economy did just fine during the three decades after World War II, when the top tax rate never fell below 70 percent. Average yearly economic growth was higher in those years than it’s been since, when taxes on the rich have been far lower. 

Bill Clinton raised taxes on the rich and the economy did wonderfully well. George W. Bush cut them and the economy slowed. 

The real job creators are America’s vast middle class, whose spending encourages businesses to expand and hire — and whose lack of spending has the opposite effect. 

That’s why the recovery has been painfully slow. So much income and wealth have gone to the top that the vast majority of Americans in the middle don’t have the purchasing power to get the economy moving again. The rich save most of what they earn, and their savings go anywhere around the world where they can get the highest return.

It would be insane to compound the damage by raising taxes on the middle class and not on the rich. 

Logic, fairness, and common sense dictate that the rich pay more in taxes. It’s the key to avoiding January’s fiscal cliff and coming up with a “grand bargain” on taming the budget deficit. And it’s central to getting the economy back on track. 

This article was originally posted on Robert Reich's blog.



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ABOUT Robert Reich

 

ROBERT B. REICH, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org. Robert Reich's new film, "Inequality for All" is available on DVD
and blu-ray, and on Netflix in February.

Start working on local

Start working on local politics to get more Greens and independents into the system. If local school boards are majority third party eventually the Party will have to pay attention. If the Greens managed to win a Senate seat or a Governorship they would be more credible and the corporate media would likely pay attention if only for a laugh. But as they climb the political ladder they gain support and as we see how little millionaires like Romney and Obama really understand and give a rats behind for the majority we will see that only by throwing the rascals out can we ever make moves toward a democratic political system away from our current plutocracy.

mr. you are a sell out ! the

mr. you are a sell out ! the people will always have a choice in the vote that eliminates these 2 reptiles and that's a vote for any of the third party candidates which by the way better represent the public of this country, albeit it is a country populated by a vast majority of pinheads .........

GDE: Here we go again. A

GDE:

Here we go again. A third-party supporter so fixated on their own superior standards that they can't see the forest for the trees

You say Obama and Romney are the same. I say that's plain bull-crap.

Why would a progressive like Bernie Sanders advise his supporters to vote for Obama? He's an Independent, and the one person in the national legislature I admire the most. And he says to vote for Obama, because he sees a big difference between Romney and Obama.

The Sierra Club (in case you don't know, an environmental organization) sees a SIGNIFICANT difference between Obama and Romney on the environment and energy. Yet you, in your profound wisdom and experience, say they're both the same.

What's going on? Have you ever considered the possibility that you may just be shilling for the Republican Party? It's really tiresome to see all the "nose-in-the-air" pronouncements about the evils of Obama. I expect such poison from the Tea Party panderers of the Rich, but from a third party that supposedly espouses reform and environmental concerns? No, I don't expect that, and it's really making me suspicious.

I'm no kid, and no political neophyte. The only presidents I helped elect in my entire voting life were JFK and Bill Clinton (outside of Obama,that is) and they weren't perfect, yet they did some good things, and I feel certain their opponents would have done a lot of bad things, like Jr. Bush did. I voted against that butthead with a vote for Al Gore, not because I loved Al Gore, but because I dreaded George W. Bush, whom I knew a lot more than most voters did. I still feel that Gore would have avoided the budget deficits, and wouldn't have lied us into an unnecessary war with Iraq, which cost trillions of dollars and the lives of thousands of fine American soldiers. And yes, I think he would have done SOMETHING about Global Warming. And unlike the Fantasy-World Greens, I voted for the "lesser evil," and I don't apologize for that, though I too wish a perfect candidate could have been my choice, with a perfect party behind him/her, but I don't live in daydreams.

"Oh, oh, I'm so picky and superior, it's beneath me to vote for a lesser evil!"
That's the marching song of the Greens this year, or so it seems. If you can't see a significant difference between Obama and Romney, what on earth is blinding you? So many educated and experienced and PRACTICAL people can, but you say they're the same. Unbelievable. And I'm not saying that with stars in my eyes over Obama. I only had modest expectations for Obama in 2008, and somewhat better expectations for his last term in office, but I have my feet firmly on the ground. No demagogue could ever sway me, maybe because I've seen too much.

Alternate parties don't win in the long run, UNLESS they build a party structure and work on it for years. There's no "instant success," though that seems to be what you're hungering for. Hard work and patience. Now the Fat Cats are controlling The Message, and you seem eager to enable them.

proof in your own words - you

proof in your own words - you win the rock award today , now go home and show your wife and kids that you're a pinhead with an opinion ......

In addition to income,

In addition to income, payroll and sales taxes disproportionally hitting the middle and lower income payers, you need to add in franchise and user fees, taxes such as gasoline, property, alcohol, tobacco and excise taxes, and government mandated insurance such as automobile liability insurance. These fees and taxes are regressive in that they affect the poor far more than the rich. After all Mitt only needs one driver's license for his fleet of limousines.

Reich talks as if Obama would

Reich talks as if Obama would really follow through on raising taxes on the wealthy. As I see it both, or the duopoly should be declared enemies of the people being the stooges acting on behalf of a plutocratic insurgency worldwide against democracy. Vote 3rd party or perish.

Plus, a vote for Obama is a

Plus, a vote for Obama is a vote for mass murder. A vote for Romney is the same. This is conspiracy to commit murder, a crime in every state, and if the murders happen (and they will) the crime is elevated to murder, not just conspiracy.

Who wants to be a capital criminal? Over 100 million in USA in the 2008 election, and it is likely the same now.

Incidentally, it isn't

Incidentally, it isn't possible to restore the economy and rebuild the country as long as we continue to pretend that the US consists only of rich and middle class people. Because of the obsession with the middle class alone, we haven't even touched on the issue of the millions of post-middle class/poor Americans who are, while so marginalized, still a core element of the overall economy/job market. The bottom line is that the conditions under which the poor exist directly impact the middle class.

Another factor (dare we

Another factor (dare we mention it?): The money that once went into basic human needs spending was immediately rolled back into local economies via necessary consumer purchases. When welfare ended, so did that flow of money to (as minimal as it might have been) to neighborhood stores.

I can't believe you mentioned

I can't believe you mentioned the right wing bandits, Simpson-Bowles, as reputable "advisors" re what should be done about the deficit. Hell, I can't believe you lept on over to the "scary, scary deficit" meme that Simpson, Bowles, Obama and every right winger on the planet is so anxious to promote, as a way to cut needed government spending.

Yes, increase taxes on the rich, but SPEND the money to create JOBS. That will pull in more taxes and enable more people to buy things, and that will in turn encourage employment.

Throwing grandma on the street because you've taken away her social security & Medicare is NOT a way to improve this country. And "modifying" "entitlements" is just right wing [and Obama]-speak for cutting benefits.

Really, Professor Reich, you should be ashamed.

In addition to economic

In addition to economic equality, in order to fix the economy we need to heal ecosystems. Obama is not doing that, so vote Jill Stein for President

GREG: You know Jill Stein

GREG:

You know Jill Stein can't win. If you don't, maybe you shouldn't "inhale."
So how will your vote for Jill possibly change anything?

Is there some magical Big Daddy somewhere who's going to observe your distaste for the two major parties and miraculously change everything to accord with your perfection-seeking ideals?

If not, then what will a vote for Jill Stein do? In the real world, I mean, not some fantasy of yours.

If Romney is elected, the 99%

If Romney is elected, the 99% lose. If Obama is elected, the 99% lose. A vote for Jill Stein will not change this election, but neither will a vote for Obama or Romney.

A vote for Obama may be switched to a vote for Romney if you live in a large district with electronic voting machines. They won't waste time with alternate parties, as switching those votes is a lot more work for the same electoral effect. Statistical analysis has shown this has already been done.

Alternate parties often win in the long run. They rarely win major office, but several times in history they have won major legislation. See:

http://www.opednews.com/articles/Why-I-m-Voting-Green-by-Chris-Hedges-12...

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