Editorial: Tax plan boosts middle class
Editorials July 9, 2012 7:16PM
President Barack Obama calls on Congress on Monday to pass a one-year extension of the Bush-era tax cuts for people who make less than $250,000 a year. | Susan Walsh~AP
Updated: August 11, 2012 6:13AM
Nothing may be more important to our nation’s future than preserving the middle class.
All Americans, we trust, can agree on that.
And any fair-minded plan to reduce federal deficits without throwing the economy into another tailspin or savaging essential programs, such as Medicare, must include additional revenues — beginning with higher taxes on the wealthiest Americans.
Not all Americans, we know, agree on that.
To our mind, though, it is all of a piece — championing the middle class while reducing deficits while minimizing damage to a still ailing economy. The tax plan President Barack Obama called for Monday serves those interconnected aims.
Obama proposes temporarily extending the Bush-era tax cuts for people making less than $250,000 while letting the taxes of those who make more return to levels last seen during the Clinton administration.
That would keep more money in the pockets of middle-class Americans, whose spending provides a direct boost to the economy, while generating $850 billion in revenues over 10 years. That’s money desperately needed to fund a host of worthy programs, from student loans to the military, without adding to the federal deficit.
Republicans say it would be a mistake to raise taxes on anyone, even on multimillionaires, at a time when the economy is so weak, and we might agree if the alternative were not worse. But we can’t imagine an America where money for education, for example, is slashed to nothing while Warren Buffett’s billions go untouched.
We also find it curious that this general GOP worry — the danger of slowing spending during hard times — fails to discourage them from chopping mightily at government spending. Too many Republicans on Capitol Hill, we fear, are doing the bidding of their billionaire benefactors or are captive to Grover Norquist’s mindless no-tax pledge.
Obama has set the income limit awfully low, at just $250,000, and even other Democrats think the cutoff should be $1 million. But the president’s plan would cover 98 percent of all households. More to the point, setting the cutoff so low sends the message that this is firmly a tax break for the struggling middle class — that ever-shrinking American core.
That is the crisis. America’s income gap is wider than anytime since before the Great Depression. More than 20 percent of the nation’s income now goes to the richest 1 percent, up from 7 percent in 1980.
The wealthy are doing just fine, thanks in part to the grand opportunities this country has given them.
The middle class is hurting bad.