American Prospect runs special section on saving the middle class






Here’s an excerpt from one of the articles by my personal hero, Dean Baker:

The fact that progressives must look beyond the narrow range of tax and transfer policy does not mean that we should ignore tax policy, especially the upcoming battle over extending the Bush tax cuts to the wealthy beyond 2012. But we have to start being more creative in our approach.

For example, a financial speculation tax (FST) not only provides a great opportunity to raise a large amount of revenue (as much as $1.8 trillion over the next decade) through an overwhelmingly progressive tax; it also provides an opportunity to directly attack one of the main sources of growing inequality. Many of the most outlandish paychecks on Wall Street depend on the sort of quick-turnover trading that would become far less profitable with an FST. Implementing such a tax could have at least as much impact on the before-tax distribution of income as it does on the after-tax distribution.

Of course, getting an FST will not be simple. Opponents, including many top figures in the Democratic Party, will do everything in their power to prevent an FST from ever being taken seriously. But the battle for such a tax is well worth putting before the American public. On one side are the politicians who want to cut Social Security and Medicare to meet their deficit targets. On the other side are leaders who want to tax the Wall Street speculators who helped to crash the economy. There would be little doubt which side the public would favor if given a clear choice, even if the campaign contributions go heavily in the opposite direction.

The FST is unusual as a tax that will directly have positive distributional consequences. The larger agenda for restoring greater equality must include new approaches to monetary policy, trade policy, and patent policy as well as labor — management relations and corporate governance, but taxing Wall Street speculation in order to protect our most important social welfare programs would be a great place to start.


Filed under Political Reform, taxes

10 responses to “American Prospect runs special section on saving the middle class

  1. CapnAmerica

    Couple an FST with a higher income tax on the rich (like under Clinton) and moving capital gains taxes back up to the same as on unearned income, and you’ve just solved about half the budget “crisis.”

  2. indypendent

    I have been paying close attention to all the speakers at the CPAC conference. And they all have the same playbook – Republicans know how to reduce the deficit.

    I heard former Gov Tim Pawlenty on NBC Today Show stating that he knows how to tackle the deficit. Really… that why he left his state of Minnesota with a $6 billion deficit?

    Haley Barbour of Mississippi is another GOPPER who claims that Republicans can reduce the deficit. Really……is that why Mississippi is rolling in a budget surplus?

    All these blowhards are singing the same song as their little cowboy …..George W. Bush.

    GWB = big hat, no cattle.

    In other words – a big bunch of nothing….

  3. I’m going to need to study this, Cap’n, and read the entire article before I can even understand it, let alone comment.

    • indypendent

      I’m with you fnord. It’s late and I just got home from my weekend job – thinking about any tax plan is not exactly on my agenda right now!


      Unless, of course, that tax plan can bring me in alot of money……now that is tax plan I could learn to like….

  4. Where are we heading? It’s just beyond stupid.


    House Republicans announced a plan yesterday to cut $43 billion in domestic spending and international aid, while increasing spending for military and defense by another $8 billion. This proposal comes just months after billions of dollars were added to the deficit with an extension of tax cuts to the wealthiest 2 percent of Americans. House Republicans focused in on only 12 percent of federal spending, and targeted things like education, the environment, food safety, law enforcement, infrastructure, and transportation — programs that benefit or protect most Americans. They also proposed cutting funding for programs that benefit the most vulnerable members of our society, such as nutrition programs for our poorest women and children. We don’t yet know all the cuts Republicans are targeting in their proposals, but it’s good to finally know what their priorities are.

    Under the proposed budget cuts, deficit reduction will not come from the super-rich; it will come from the rest of us. And the poorer you are, the more vulnerable you become, and the more you will pay for the burdens of deficit reduction. For example, Women, Infants, and Children (WIC), a program that helps provide food to hungry mothers and their children faces a $758 million cut.

    • indypendent

      If you listen carefully to these Social Conservatives – they are pushing for a holy war with the Muslims.

      Just like Glenn Beck and his muslim caliphate crap story…….this is all about beating that war drum.

  5. Obama Shouldn’t Allow Republicans to Frame the Debate as How Much Spending Should Be Cut

    President Obama has chosen to fight fire with gasoline.

    Republicans want America to believe the economy is still lousy because government is too big, and the way to revive the economy is to cut federal spending. Today (Sunday) Republican Speaker John Boehner even refused to rule out a government shut-down if Republicans don’t get the spending cuts they want.

    Tomorrow (Monday) Obama pours gas on the Republican flame by proposing a 2012 federal budget that cuts the federal deficit by $1.1 trillion over 10 years. About $400 billion of this will come from a five-year freeze on non-security discretionary spending – including all sorts of programs for poor and working-class Americans, such as heating assistance to low-income people. Most of the rest from additional spending cuts.

    That means the Great Debate that starts this week will be set by Republicans: Does Obama cut enough spending? How much more will he have cut in order to appease Republicans? If they don’t get the spending cuts they want, will Tea-Party Republicans demand a shut-down?

    continued —

    • Zippy

      I just told Bob Reich that he and Paul Krugman need to quit calling these people “deficit hawks.”

      The one thing they don’t give a damn about is cutting the deficit. The past 30 years have proved this beyond any doubt.