Can taxing the rich save America’s middle class?

  • By Joel Mathis and Ben Boychuk Tribune News Service
  • Friday, January 30, 2015 12:12pm
  • OpinionCommentary

President Barack Obama on Jan. 20 proposed raising taxes on the rich in order to fund programs that will benefit the middle class, including a tax cut for middle-income wage earners. “The notion that in order for some people to do better, someone has to do worse is just not true,” GOP Sen. Marco Rubio said.

But the president noted that America’s richest have been doing better for years, while middle class wages have stagnated. “Will we accept an economy where only a few of us do spectacularly well?” he asked.

Should the government redistribute wealth? Joel Mathis and Ben Boychuk debate the issue.

Maybe

What took him so long? Yeah, President Obama’s been busy the last few years, but the plight of the middle class isn’t exactly news. Middle class incomes have been stagnating since the 1970s, and it’s a problem that economists and observers on the left have been talking about for years.

So: Great for the president. Glad he finally caught up.

Of course, the cries of “redistribution” are at full volume from our conservative friends. “The notion that in order for some people to do better, someone has to do worse is just not true,” Sen. Rubio says, and it would be wonderful if he felt the same way when it was the middle class that was getting squeezed instead of the rich .

But we can talk another time about how government has long been at work redistributing income to America’s wealthiest citizens, and how a change in focus to redistribute wealth downward from the top would be welcome indeed.

Instead, a question: Will Obama’s middle-class programs work?

And the answer is: Meh, maybe. There’s certainly financial security to be found in marriage, and there’s evidence that Americans are delaying marriage because they don’t think they can afford it. If a tax cut eases the minds of those Americans, and helps them ultimately thrive on their own, who can argue?

But the manufacturing jobs that once supported the middle class have largely shipped overseas, and the unions that helped laborers achieve middle class wealth have all but disappeared from the American landscape. We haven’t figured out how to sustain a middle class without those elements — it’s an open question whether it’s possible. We no longer live in a society that effortlessly produces middle class jobs; unless and until that issue is resolved, all the targeted social programs in the world will be mere Band-Aids.

So: Glad Obama sees the problem. The solution? Still to be found.

—Joe Mathis

No

The republic may be crumbling, but at least the economy appears to be on the mend after more than five years of anemic “recovery.” Rather than encouraging more economic growth, the president on Tuesday outlined a policy agenda certain to hobble it — again.

President Obama in his State of the Union address said that, thanks to “a growing economy, shrinking deficits, bustling industry and booming energy production,” the U.S. has “risen from recession.”

Is it true? Not without caveats. The U.S. gross domestic product grew nearly 3 percent last year, accelerating its pace from a crawling 2 percent annual growth rate to something like a slow walk.

Historically speaking, for the U.S. economy to really deliver on more jobs and higher wages, annual GDP growth needs to be closer to 4 percent, and employers should be hiring 300,000 to 400,000 workers a month, rather than the current average of 250,000. One quarter of 5 percent growth does not a roaring economy make.

Despite all this, President Obama has concluded the time is right for a $320 billion tax increase to expand existing federal programs and create new ones.

The president’s proposed tax hikes target the rich, but not only the rich. It would also take a cudgel to investors. More important, the middle class will pay, too, for the privilege of new middle-class entitlements.

Consider the president’s greatly hyped proposal to offer most Americans two years of “free” community college. The plan would cost $60 billion over 10 years to cut tuition that is practically free in most states anyway, greatly increasing demand on already overcrowded community colleges.

And to pay for it, the president wants to re-impose a tax on 529 college savings plans, which allow millions of Americans to deposit and withdraw money tax-free for college tuition, which is very expensive nowadays. In other words, he would tax responsible, middle-class savers to pay for a new program that promises more than it could ever deliver.

Congress is certain to squash this folly. But opposition isn’t enough. The Republicans need to show why the president’s plan would hurt more than it helps, and force the lame duck to explain why he opposes policies that would truly unleash the U.S. economy.

— Ben Boychuk

Ben Boychuk (bboychuk@city-journal.org) is associate editor of the Manhattan Institute’s City Journal. Joel Mathis (joelmmathis@gmail.com) is associate editor for Philadelphia Magazine. Visit them on Facebook: www.facebook.com/benandjoel.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Opinion

Initiative promoter Tim Eyman takes a selfie photo before the start of a session of Thurston County Superior Court, Wednesday, Feb. 10, 2021, in Olympia, Wash. Eyman, who ran initiative campaigns across Washington for decades, will no longer be allowed to have any financial control over political committees, under a ruling from Superior Court Judge James Dixon Wednesday that blasted Eyman for using donor's contributions to line his own pocket. Eyman was also told to pay more than $2.5 million in penalties. (AP Photo/Ted S. Warren)
Editorial: Initiative fee increase protects process, taxpayers

Bumped up to $156 from $5, the increase may discourage attempts to game the initiative process.

toon
Editorial cartoons for Thursday, March 28

A sketchy look at the news of the day.… Continue reading

Washington state senators and representatives along with Governor Inslee and FTA Administrator Nuria Fernandez break ground at the Swift Orange Line on Tuesday, April 19, 2022 in Lynnwood, Washington. (Olivia Vanni / The Herald)
Editorial: Community Transit making most of Link’s arrival

The Lynnwood light rail station will allow the transit agency to improve routes and frequency of buses.

Protecting forests and prevent another landslide like Oso

Thank you for the powerful and heartbreaking article about the Oso landslide… Continue reading

Boeing’s downfall started when engineers demoted

Boeing used to be run by engineers who made money to build… Continue reading

Learn swimming safety to protect kids at beach, pool

Don’t forget to dive into water safety before hitting the pool or… Continue reading

An image of Everett Mayor Cassie Franklin is reflected in a storefront window during the State of the City Address on Thursday, March 21, 2024, at thee Everett Mall in Everett, Washington. (Ryan Berry / The Herald)
Editorial: State of city address makes case for Everett’s future

Mayor Franklin outlines challenges and responses as the city approaches significant decisions.

FILE - The massive mudslide that killed 43 people in the community of Oso, Wash., is viewed from the air on March 24, 2014. (AP Photo/Ted S. Warren, File)
Editorial: Mapping landslide risks honors those lost in Oso

Efforts continue in the state to map areas prone to landslides and prevent losses of life and property.

Comment: Why shootings have decreased but gun deaths haven’t

High-capacity magazines and ‘Glock switches’ that allow automatic fire have increased lethality.

toon
Editorial cartoons for Wednesday, March 27

A sketchy look at the news of the day.… Continue reading

Burke: ‘Why not write about Biden, for once?’ Don’t mind if I do.

They asked; I’ll oblige. Let’s consider what the president has accomplished since the 2020 election.

Comment: Catherine missed chance to dispel shame of cancer

She wasn’t obligated to do so, but she might have used her diagnosis to educate a sympathetic public.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.