Robert Reich's proposal for $4 trillion of deficit reduction over the next decade:
- Raise the tax rate to 55.2% for those making over $1 million
- Charge a 2% surtax on the wealth of the richest one-half of 1 percent
- Enact a tax of one-half of 1 percent on financial transactions
- Raise the capital gains rate to match the rate on ordinary income
- Cap the mortgage interest deduction at $12,000 a year
- Eliminate special tax preferences for oil and gas
- Eliminate price supports for big agriculture
- Eliminate tax breaks and research subsidies for Big Pharma
- Eliminate unnecessary weapons systems for military contractors
- Eliminate indirect subsidies to the biggest banks on Wall Street
- End the Bush tax cuts on incomes between $250,000 and $1 million
The result is deficit reduction without a Grand Ripoff of the middle class.
See
The President’s Opening Bid on a Grand Bargain: Aim High.
There are some other issues which should also be addressed.
Consider raising the cap on income subject to Social Security payroll taxes, rather than cutting benefits.
Raising the Medicare payroll tax from 2.9% (employees only pay 1.45%) would also help offset rising health care costs. There hasn't been a rate increase since 1986, even though costs as a percentage of GDP have risen.
The payroll tax holiday mixes general revenues into the Social Security Trust Fund. Social Security should be entirely self-funded, and putting general revenues into the fund set a dangerous precedent. When general revenues can be put in, revenues can also be taken out. Social Security is the most successful government program ever, and is critical for keeping seniors out of poverty (and for preventing a return of poor houses). It is a self-funded retirement and disability insurance program which is not subject to Wall Street shenanigans, mismanagement, high administrative fees, or personal or corporate bankruptcy. Don't screw with it.
Middle class incomes have decreased while income of the 1% has quadrupled. The lack of a living wage for working Americans means that government has had to subsidize workers in the form of assistance programs for the poor. Conservatives argue that employers should be free from minimum wage standards, but in effect they are just passing costs onto the government. A significant rise in the minimum wage is long overdue.
The lack of single-payer health care such as that in most other western countries has resulted in one of the most expensive health care systems in the world. Health care should also be de-coupled from employment (and from being the responsibility of corporations). Medicare for all should be looked at as a way of making American businesses more competitive in the global marketplace.
Republicans have practiced "starving the beast" for years, de-coupling revenue from costs while giving the wealthy enormous tax breaks. As a result, the National Debt has skyrocketed. Additionally, conservatives are using the debt as an excuse to cut social programs. Conservatives abandoned the notion of a responsible fiscal policy, so it is up to Democrats to enable a return to fiscal sanity.
It is time to ignore the demands of lobbyists, to ignore the demonizing rhetoric of the radical conservatives, and to return to representing the interests of the vast majority of Americans. It is time to risk political careers and just do what is right. That is leadership.
Copies of this post have also been e-mailed to:
- President Barack Obama (D)
- Senator Al Franken (D-MN)
- Senator Amy Klobuchar (D-MN)
- Representative Collin C. Peterson (D-MN 7th)
