Earlier, I've written about how Robert Reich gets it when it comes to economic policy issues, and he's done it again in pointing out how topsy-turvsy the conversation is in the DC Beltway when it comes to actually solving our economic problems. What did Robert Reich bring up that was so daring, and yet so simple?
Imagine that---actually asking the super-weathy to partake in the shared sacrifice that our President talks about. The fact is that right now, the super-wealthy aren't sacrificing any skin in the game at all, and they've just gotten away with a huge bailout that was the extension of the Bush tax cuts.
So, when politicians talk about how we're doing shared sacrifice by cutting the budget for the low-income and the middle class, they pretend the rich is a part of that shared sacrifice, but they're not at all.
The rich don't suffer from cuts to:
3. Unemployment programs
4. Pre-k education
5. Primary and secondary school education
6. Higher education
7. Nursing programs
8. Loan repayment programs for doctors
9. Food assistance programs
10. Heating assistance programs
11. Public transportation
12. Utility assistance
13. Special education
14. Child welfare
They don't SUFFER from these cuts at all that we face on the state and national level! They get along just fine with the tax cuts they've received from the White House administration and the GOP. Chris Bowers also crystallizes very clearly the disconnect between politicians in Washington, D.C., and the rhetoric they espouse about 'shared sacrifice' in the budget cuts:
On the call with progressive bloggers, I asked OMB communications chief Ken Baer what shared sacrifices the budget proposal placed on higher income Americans. Baer responded the administration’s budget proposal reduced the itemized deductions wealthier Americans could claim on their tax returns, and also raised taxes on Americans making more than $250,000 a year.
As a follow-up, I pointed out that those changes to the tax code were extremely unlikely to ever become law, given they were just extended two months ago and that Republicans now control the House of Representatives. By contrast, the cuts to programs serving lower income Americans were practically guaranteed to pass. So, the net result of the proposal is that higher income Americans won’t have to sacrifice anything. In response, Baer said that no one thought Democrats and Republicans could work together during the lame duck, and proved everyone wrong by extending unemployment benefits.
I didn’t press the point after that, because other people deserved a chance to ask a question, but Baer’s response was extremely unsatisfactory. In December, significant numbers of Democrats and Republicans in Congress worked together to lower taxes for wealthier Americans, not raise them as this budget proposal would like. This demonstrated was how there was virtually no chance at all of passing any tax increase on wealthier Americans during the 112th Congress, making any notion of the 2012 budget including “shared sacrifice” for higher income Americans a fantasy. Lower income Americans will disproportionately bear the brunt of these cuts.
And now back to Robert Reich on the issue of progressive taxation. He has the bright idea of raising taxes on the super-wealthy and lowering taxes for the middle class. It makes one wonder why those pointy-headed politicos in D.C. haven't proposed this yet or take it seriously. It's kind of like the silly saying where to succeed in D.C., all you have to do is fail upwards. The same goes for putting forth rightward proposals in order to 'succeed' in the eyes of the Beltway.
In fact, a Democratic president should propose a major permanent tax reduction on the middle class and working class. I suspect most of the public would find this attractive. But here again, the only way to accomplish this without busting the bank is to raise taxes on the rich.
Republicans have done a masterful job over the last thirty years convincing the public that any tax increase on the top is equivalent to a tax increase on everyone -- selling the snake oil of "trickle down economics" and the patent lie that most middle-class people will eventually become millionaires. A Democratic president would do well to rebut these falsehoods by proposing a truly progressive tax.
Will the rich avoid it? Other critics of my proposal say there's no way to have a truly progressive tax because the rich will always find ways to avoid it by means of clever accountants and tax attorneys. But this argument proves too much. Regardless of where the highest marginal tax rate is set, the rich will always manage to reduce what they owe. During the 1950s, when it was 91 percent, they exploited loopholes and deductions that as a practical matter reduced the effective top rate 50 to 60 percent. Yet that's still substantial by today's standards. The lesson is government should aim high, expecting that well-paid accountants will reduce whatever the rich owe.
Besides, the argument that the nation shouldn't impose an obligation on the rich because they can wiggle out of it is an odd one. Taken to its logical extreme it would suggest we allow them to do whatever antisocial act they wish -- grand larceny, homicide, or plunder -- because they can always manage to avoid responsibility for it.
Now, this is what's missing from the conversation on 'shared sacrifice' from the White House administration, Congress, and that bipartisan group of Senators that are meeting in secret to talk about cuts to Medicaid, Medicare, and Social Security. We should continue to press our elected officials on the issue of progressive taxation. After all, it's what the Democratic wing of the Democratic Party is about---making sure that everyone, including the super-wealthy, actually have skin in the game.