Obama is Right to Raise Taxes on the Rich

Obama is Right to Raise Taxes on the Rich

President Barack Obama hit the campaign trail this week and delivered two inspiring speeches that outlined the differences between the Democratic and Republican approaches to strengthening the U.S. economy.

The Republicans would like to revert to their failed policies of cutting taxes for the very rich and doing away with government regulations on just about everything. 

The Democrats want to raise taxes on those who can most afford it and regulate the financial institutions to prevent the greedy people that run them from destroying the economy again. 

Republicans had their way for most of the years between 1980 and 2008, and we’ve seen the results of their failed economic policies that favor the rich over the working class. 

Take a look at this graph from the first in a series of Slate articles by Timothy Noah about income inequality:

Chart of the Top Ten Percent income share 1907 - 2008

Here’s a key statistic from the article“From 1980 to 2005, more than 80 percent of total increase in Americans’ income went to the top 1 percent. 

House Minority Leader John Boehner of Ohio delivered a speech in Cleveland on August 24th in which he said, “…America’s employers are afraid to invest in an economy stalled by ‘stimulus’ spending and hamstrung by uncertainty.  The prospect of higher taxes, stricter rules, and more regulations has employers sitting on their hands.”

On Labor Day, Obama was in Cleveland where he delivered a strong rebuttal to Boehner’s remarks:

Now, anybody who thinks that we can move this economy forward with just a few folks at the top doing well, hoping that it’s going to trickle down to working people who are running faster and faster just to keep up, you’ll never see it.  (Applause.)  If that’s what you’re waiting for, you should stop waiting, because it’s never happened in our history.  That’s not how America was built.  It wasn’t built with a bunch of folks at the top doing well and everybody else scrambling.  We didn’t become the most prosperous country in the world just by rewarding greed and recklessness.  We didn’t come this far by letting the special interests run wild.  We didn’t do it just by gambling and chasing paper profits on Wall Street.  We built this country by making things, by producing goods we could sell.  We did it with sweat and effort and innovation.  (Applause.)  We did it on the assembly line and at the construction site.  (Applause.)

And on Wednesday in Parma, Ohio Obama explained why he will extend tax cuts for the middle class and why he will not extend the Bush Tax cuts for the super rich:

Now, I believe we ought to make the tax cuts for the middle class permanent.  (Applause.)  For the middle class, permanent.  These families are the ones who saw their wages and incomes flat-line over the last decade -– you deserve a break.  (Applause.)   You deserve some help.  And because folks in the middle class are more likely to spend their tax cut on basic necessities, that strengthens the economy as a whole.

But the Republican leader of the House doesn’t want to stop there.  Make no mistake:  He and his party believe we should also give a permanent tax cut to the wealthiest 2 percent of Americans.

AUDIENCE:  Nooo!

THE PRESIDENT:  With all the other budgetary pressures we have -– with all the Republicans’ talk about wanting to shrink the deficit — they would have us borrow $700 billion over the next 10 years to give a tax cut of about $100,000 each to folks who are already millionaires.  And keep in mind wealthy Americans are just about the only folks who saw their incomes rise when Republicans were in charge.  And these are the folks who are less likely to spend the money — which is why economists don’t think tax breaks for the wealthy would do much to boost the economy.

So let me be clear to Mr. Boehner and everybody else:  We should not hold middle-class tax cuts hostage any longer.  (Applause.)  We are ready, this week, if they want, to give tax cuts to every American making $250,000 or less.  (Applause.)  That’s 98-97 percent of Americans.  Now, for any income over this amount, the tax rates would just go back to what they were under President Clinton.

And you might recall that employers were not “hamstrung” by the Clinton-era tax rates.  The economy boomed, and the federal deficit became a surplus.

Bush and the Republicans blew our stable economy apart with deregulation, tax cuts, and unfunded trillion dollar wars.  On their watch the income disparity reached its highest peak in history.  Are we to hand control of our economy back to the Republicans who, when it comes to income taxes, do everything in their power to protect the wealth of the richest 5% of our population regardless of the impact on the federal deficit? 

That’s a bad idea.

Spread the word.

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