Tax the Rich. Problem Solved
What if there was a group of terrorists holding your family hostage with a gun pointed at themselves, demanding the account number to your pension fund? Would you negotiate with the terrorists by allowing them access to your savings, or would you let them shoot themselves and keep your retirement money intact?
Congressional Republicans are threatening to default on the debt unless President Obama caves to their demands to cut Medicare, Medicaid and Social Security spending. Regardless of the market-crashing consequences of a debt default, actually doing so would be unconstitutional. Section 4 of the 14th Amendment clearly states that "The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions...shall not be questioned." Republicans are violating the constitution by threatening a debt default. End of discussion.
Credible economists and lawmakers on both sides generally agree that raising the debt ceiling is an essential part of governing, and that a large deficit can pose a danger to economic security. But if Speaker Boehner genuinely cares about deficit reduction, he need only look to ending his own party's policies and shifting the tax burden. Swearing allegiance to Grover Norquist's no-new-taxes pledge, the GOP will only allow room for $4 trillion in cuts, arguing this is a spending problem, not a revenue problem. However, their budget would collect exactly $4 trillion less over the next decade through even more tax cuts for corporations and the wealthy.
Contrary to Republican claims, the United States is one of the lowest-tax countries in the world-- U.S. corporations and wealthy citizens pay far less in taxes than other developed nations. Since 1950, capital gains taxes have dropped 10 percent, tax rates for million-dollar households have decreased 10 percent since the mid-nineties, and the estate tax has virtually disappeared for those with the largest fortunes since the onset of the Bush presidency. Four simple solutions would close that $4 trillion budget gap in the next decade, without even touching Social Security or Medicare.
By passing laws like Sen. Carl Levin's Stop Tax Haven Abuse Act, we could generate over $100 billion in new revenue from closing loopholes that allow corporations to shift profits to overseas bank accounts. Through modest taxation of speculative Wall Street trading, we could bring in another $150 billion per year. With higher income tax brackets for households earning over $1 million annually, as Rep. Jan Schakowsky has proposed, we would gain another $100 billion. And progressively taxing estates worth $5 million or more would mean an extra $45 billion in tax revenue.
A truly principled leader would refuse to negotiate with terrorists, and allow them to turn the gun on themselves. Our President needs to stand firmly behind these common-sense proposals, and remove from the table any cuts to the programs we've spent our lives funding from our own paychecks. No exceptions.