For the last eight years, our nation has been “borrowing and squandering,” racking up over $7 trillion in debt to bailout Wall Street, pay for war and provide irresponsible tax cuts to our wealthiest citizens. This has led to a breakdown in trust of government and an understandable concern about how our tax dollars are being used.
Under an Obama administration, we expect our nation’s spending priorities to change. To address the economic crisis, there will need to be long overdue investments in infrastructure, health care, new energy systems, and economic opportunity for all. But with the national debt now pushing $11 trillion, our nation must come up with new revenue to pay for these investments. We must develop a responsible plan to pay for some of these investments today.
Candidate Obama campaigned with a pledge to raise taxes on those with annual incomes over $250,000. Yet even though there was no mistaking this campaign promise, 52 percent of us with these high incomes still voted for him. We understood it was time to end the reckless fiscal policies of the last eight years and make the tax system fairer.
In the coming months and years, President Obama will come under attack for any proposal that will require wealthy citizens to pay more taxes. As during the campaign, he will be called a “socialist” for wanting to “spread the wealth.” But progressive taxation policies after World War II paid for investments like the GI Bill, first-time homebuyer programs and massive public infrastructure that helped the whole economy. These were investments that expanded economic opportunity for broad segments of the population.
Business leaders and wealthy individuals can play a critical role in restructuring federal taxes by advocating to pay their fair share. Public figures, including Warren Buffett and Bill Gates Sr., have already spoken out about the importance of increased capital gains and estate taxes. The global economic crisis has brought a new urgency to this debate while opening up opportunities for alliances that bridge economic and racial divisions. Poor, middle and working class people face real threats to their livelihoods. Wealthy people are recognizing how their financial security is tied to the security of others, and how the economic policies and investment practices that have served to concentrate their wealth can hurt everyone.
The Institute for Policy Studies (IPS) is working with leaders of the Congressional Progressive Caucus and a number of partners to develop comprehensive tax reform proposals. We have identified policies that would:
• Collect revenue from those with the greatest capacity to pay;
• Discourage financial speculation; and
• Strengthen the overall economy.
As part of this campaign, we have launched the Wealth for the Common Good project to bring together business leaders and high net worth individuals to advocate for prudent and progressive tax policies.
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