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Judis: Taxing the Rich Makes Sense

By    |   Tuesday, 21 Jul 2009 11:27 AM

Long-time center-left writer John Judis is calling a scheme by House Democrats to tax the wealthy to fund government-run healthcare "small potatoes," and he heartily advocates taxing "the rich" in the latest issue of The New Republic, the venerable progressive magazine.

"House Democrats have proposed to pay for their national health insurance by imposing a 1 percent surtax on the income tax bill of couples making more than $350,000 — that's the top 1.2 percent of households," writes Judis, who, during the 1980s and 1990s was known as a fiscal conservative and centrist on economic issues.

"The surtax would rise to 5.4 percent for households making more than a million dollars. That's pretty small potatoes for the country's high-rolling class, but the proposal has encountered stiff resistance from Republicans and Blue Dog Democrats as well as from the editorial pages of The Wall Street Journal and The Washington Post," notes Judis.

But, Judis complains, critics don't make the obvious argument — that the tax increases would target high-value political contributors who are important to congressional Republicans and to Democrats who can't depend on contributions from labor unions or liberal professionals.

Rather, Judis said, conservatives concentrate their opposition on the economics of the proposal.

The Republicans and Blue Dog Democrats, along with The Wall Street Journal, say it will hurt small business and discourage "entrepreneurial activity."

The Washington Post maintains that taxing the rich to pay for the health care program would deprive Congress of a revenue source it would need in the future to reduce the deficit.

These arguments make little sense, writes Judis.

“I want to take the argument a step further and address the Republican/Blue Dog argument that taxing the rich will — in the words of one clumsily-written Congressional letter — 'kill the goose that will lay the golden eggs of our recovery.'”

Sounding more like an advisor to FDR in the 1930s than a centrist writer, Judis said.

“I think it's important to realize that during a recession, taxing the rich can speed a recovery as long as the revenue it creates is spent rather than saved. And during a recovery, taxing the rich can help stabilize the economy. It can be a good thing to do in either case."

But the old-time progressive argument trotted out by Judis now is not persuasive to many.

Economists note tax increases would not be considered were it for the trillion-dollar "stimulus" program rushed through Congress by President Obama.

"Long before the age of Obama, federal spending became the panacea for social problems," writes James Bovard in Barron's magazine.

"Not content with new spending for new ideas, the Obama administration has revived spending for bad, old ideas."

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Long-time center-left writer John Judis is calling a scheme by House Democrats to tax the wealthy to fund government-run healthcare "small potatoes," and he heartily advocates taxing "the rich" in the latest issue of The New Republic, the venerable progressive magazine....
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2009-27-21
Tuesday, 21 Jul 2009 11:27 AM
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