Originally appeared as an editorial in USA Today
The American people value hard work and responsibility. We know that we must all work hard to succeed, and we ask much of our fellow citizens: that we become informed voters, that we act as responsible consumers and business leaders, and that we pay our fair share of taxes.
High-income households have benefited disproportionately from recent economic growth. Between 2002 and 2007, the top 1% of earners, those currently making more than $378,000 a year, captured a whopping 65% of economy-wide income gains. Those in the top 1% now take home around 20% of the nation’s total income, and control over one-third of all wealth in the country.
Tax policies of the past decade also excessively benefited the rich, who now pay relatively low taxes by historical standards. For example, the top 400 households, with an average income of over $350 million, saw their taxes fall to just under 17% in 2007, down from an average of 26% in 1992. This is just a couple percentage points above the rate for middle-income families and less than the economy-wide average. Bush-era changes lowered taxes for high-income individuals, while adding trillions to the national debt. Thus we have an economy in which high-income individuals are not only taking home more and more, but they are also paying less and less.
This deficit reduction debate comes at a time when the middle class is struggling in the aftermath of the Great Recession; high unemployment remains and foreclosure crises persist. Neglecting these concerns, Congress is turning towards cuts — in areas such as education, Medicare and research — under the auspices of deficit reduction while protecting tax breaks for the rich. The focus should be on investment and jobs, not middle-class pain.
By itself, higher taxes on high-income individuals will not solve the nation’s long-run deficit problems. The growth rate of health care costs must be slowed. Spending by the Department of Defense should be reduced. Government programs that are wasteful or ineffective should be eliminated. But we cannot ask for shared sacrifice while exempting those best able to afford to pay a little more.
