Mainly the GOP is blaming Obama for it with his plan to raise taxes on millionaires — and by millionaires I mean people who make a million or more per year. But there are also those on the left blaming the GOP for the same thing due to the status quo where the top one-percent control over fifty percent of the wealth in the country.
I think Obama framed it wrongly, by saying that the rich need to pay their “fair share.” This is an impossible argument. Everyone already feels like they’re paying their fair share already. And even those, like Warren Buffett, who argue that the rich should be taxed higher don’t necessarily want to just give up their money. (There’s a story going around the conservative blogosphere about how Berkshire Hathaway owes all this money in back taxes to the IRS but there isn’t a single MSM article confirming it. It may or not be true.)
The better way to argue it is simply this: all the spending that we’re cutting in order to reduce our debt has been gutting social programs that go overwhelmingly to the poor and middle classes, so by raising taxes on the rich back to 1990s levels – which were still not high compared to historical levels – it simply ensures that all Americans share in the sacrifice of reducing the nation’s worsening debt. You cut teachers’ pensions, you lay off state workers, you’re reducing the overall wealth of the working class, the middle class — whose wealth was hit the hardest in the 2008 recession, even more so than the rich. (The middle class tended to have most of their wealth tied into their homes which all drastically lost value while the wealthier classes had more diversified portfolios which rebounded quickly from the recession.) Tax hikes on the rich provide a balance. A necessary hit to keep the entire country afloat.
But then it becomes an argument about whether or not those programs should even exist anyway. Don’t buy into that. It’s a red herring.
If we’re not reforming Medicare/Medicaid, then the cuts are simply ideological in nature — cutting things like teachers’ pensions, police officers’ and firefighters’ jobs, etc. — and don’t come close to reducing our deficits by more than a tiny fractional amount. If anyone thinks that we’re going to solve the debt crisis by eliminating the EPA and cutting foreign aid have zero understanding of just how much of a percentage of the federal budget goes to those programs compared to the debt. It’s using the guise of fiscal responsibility to make partisan slashes to the budget.
And, for the most part, the Obama Administration has been on board with this, hoping to illicit some bipartisan support through their centrist game plan. It’s not worked very well.
So now here is the latest attempt, which has pleased some liberals with his class warfare claims to rile the base and put some pressure on the Republicans. It might work. Polls – including Rasmussen which tends to lean conservative – show that a majority of Americans favor tax hikes for the rich over spending cuts to reduce the debt. Maybe that is class warfare.
Or maybe it’s that the bottom 90 percent have felt stepped on and neglected for too long by both big business and the government and feel that it’s time that the rich take a little bit of a hit like the rest. Because while the rich will feel pinched by added taxes, they’ve also felt unprecedented benefits over the past thirty years, the 400 richest Americans seeing their wealth grow over 400 percent since 1995 while the majority of us have seen ours go down over the past decade.
My math isn’t that great, but raising tax rates roughly 4 percent on the rich doesn’t exactly negate those gains the rich enjoyed for the past three decades. Hardly class warfare. Class wrapping-on-the-knuckles maybe.