Fix the debt. Restore Clinton economic policies.
I've heard many people claim that the progressive income tax punishes success and discourages motivation. I've also heard people claim that wanting to tax higher incomes is envy or jealousy. As someone who's been in the higher income bracket myself, I cannot be accused of either. I am writing on this from the position of clear reason.
Rationally, a taxation system - any taxation system - should come from two considerations: Maximizing revenues and minimizing suffering. Heavily taxing lower incomes or middle incomes produces little revenue and much suffering. Whereas a higher income person is not made to suffer by paying a slightly higher tax - in the same way that I was not made to suffer by paying higher income taxes under the Clinton administration, when the higher income bracket taxes were higher than they are now.
If someone earns three million dollars a year, then the difference between what he paid under Clinton and what he pays now amounts to between $100,000 and $150,000 a year. This is enough to pay the salaries of two to three government employees, and it's money with which it is easy for the person to part. A multi-millionaire is not made to suffer by parting with this kind of money, whereas revenues gained for the government this way are substantial. Rationally, this is a viable solution; which is why under Clinton there was both vast economic growth and fiscal sanity - why Reagan appointee Alan Greenspan secretly thanked Clinton for raising the higher income taxes - and why Warren Buffett has said that it's wrong for him to be paying a lower income tax rate than his secretary.
This is not about "class wars" and it is not about seeing rich people as being evil. I, for one, do not believe in either, having majored in economics, having myself been in the higher income bracket, and having several very wealthy friends. Instead, this is about simple rationality. If a super-successful multi-millionaire like Warren Buffett is seeing the irrationality in the present arrangement, then so should others, whatever their income level.
The anti-tax people are always saying that the government shouldn't be taking money from the worker; but if the voter is like 99% of the population then higher income tax rates on highest incomes do not apply to him or her. Nobody is suggesting raising taxes on middle incomes or lower incomes. And while there are many people who want (or say that they want) to fix the government's deficit problem, we've already had a recent historical precedent when the deficit problem was fixed while the economy and the jobs grew substantially.
It was called the Clinton administration.
The Republicans claim that they want to fix this problem; but the Republicans have no credibility on this matter. Reagan started the vast deficits. Bush Jr. brought them back and made them still worse after Clinton had solved the problem. Obama's failure to fix the deficits has given Republicans the opportunity to absolve themselves of responsibility for the deficits and to blame it on the Democrats. But it was the Clinton Democrats that solved the deficit problem in 1990s; and it is a restoration of the successful Clinton economic policies that stands to solve it again.
Far be it from me to support massive deficits we've seen in the last decade. But this is a problem that has a solution, and it's a solution that has already been achieved in the past. Clinton had this problem solved, and bringing back Clinton economic policies would solve this problem again.
The Clinton policies worked because he was able to convince the investors that it was safe to invest in America and that the debt, that was sucking investment funds out of the economy, was being brought under control. This reduced the interest payments on the debt, which then reduced the debt. The slightly higher taxation of highest incomes then fixed the remaining hole in the budget. The result was both fiscal sanity and vast economic growth, with the private sector creating 23 million jobs in 8 years.
The people who claim that Clinton administration "cooked the books" do not admit that Bush used the same accounting practices as had Clinton. And according to these practices, Bush put America extra $6 trillion in the hole. If there was any kind of "cooking the books," the same accounting practices impugn the Bush administration and the Republican Congress that he had for six years of his government to an even greater sum than $6 trillion. And I doubt that this is a conclusion with which the Republicans would be comfortable.
There is a reliable historical precedent for achieving fiscal sanity and economic growth. And the sane way to solve this problem means applying that precedent again. America doesn't need to get rid of Federal Reserve, or to do away with income taxes and the progressive taxation system. We know how to achieve fiscal sanity, because it has been achieved before.
It is time to put into place the successful economic policies of the Clinton administration.