Q: What kind of tax reform would jump-start economy? Tax those most able to pay

2013-04-08T00:00:00Z Q: What kind of tax reform would jump-start economy? Tax those most able to payWayne Madsen Arizona Daily Star
April 08, 2013 12:00 am  • 

WASHINGTON - America's economy is in a Great Stagnation that almost rivals the Great Depression of the 1930s, and the nation is fighting a costly and prolonged worldwide war against relentless Islamic terrorism.

While the federal budget is hemorrhaging red ink, the wealthy in America not only are not paying their fair share - they quite often pay a lower percentage of their income than those in the struggling middle class.

Yet neither Republicans nor Democrats in Congress seem to have much stomach to correct this glaring inequity.

None has stepped forward to push legislation that comes close to mirroring legendary investor Warren Buffett's call for moving immediately to implement minimum taxes of 30 percent on incomes of $1 million to $10 million and 35 percent above that.

"Only a minimum tax on very high incomes will prevent the stated tax rate from being eviscerated by these warriors for the wealthy," Buffett wrote last year in a New York Times op-ed.

I'd go further. We ought to temporarily return to the high marginal tax rates that pulled us out of the Great Depression and made us the "Arsenal of Democracy" in World War II.

In 1939, President Franklin D. Roosevelt persuaded Congress to raise the top income tax rate to 75 percent applied to incomes above $5 million. During 1944 and 1945, the top rate rose to 94 percent for income above $200,000.

Surprisingly, few among the wealthy complained at the time. Many corporate executives accepted $1-a-year salaries to help the war effort.

Yet supply-siders adamantly insist that such high tax bites on the well-off are a recipe for economic disaster.

That's simply not true. The United States - despite those seemingly astronomically high tax rates on the rich - emerged from World War II as the globe's leading economy.

No one is suggesting that we institute a permanent and confiscatory tax on the nation's wealthy today. But this is a time of emergency, and surely an extra few percentage points of tax on the upper portion of the incomes of the very rich would evoke no real hardship.

And it would provide the extra billions the nation desperately needs to shore up its crumbling roads and bridges, and provide the advanced scientific and technical educations we need to keep pace with China and other emerging rivals in today's global economy.

And, offer the state-of-the-art care and aid that a grateful nation should provide the legions of traumatized and battle-scarred troops returning from more than a decade of ill-advised misadventures in the Middle East.

As FDR noted during our Great Depression, "The test of our progress is not whether we add more to the abundance of those who have much, it is whether we provide enough for those who have little."

Time is past due for America's most fortunate to help us achieve FDR's dream of "a country in which no one is left out."

Impose high taxes on rich, who can pay

Editor's note

Today's pieces from the McClatchy-Tribune News Service offer two views on tax reform.

Wayne Madsen is a contributing writer to the Online Journal (onlinejournal.com) and an author of several books with a progressive perspective.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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