Greater Tax Fairness Is Achievable

The Wall Street Journal today reminds us that the top 1% of Americans have seen the greatest gains in earnings in the past decade and their tax rates are at the lowest level in 18 years. Thus,
Ezra Klein observes in American Prospect:

"...The rich have most of the income. They also pay most of the taxes. It's entirely possible, as we see from the Obama tax plan and the various analyses that have been done on it, to raise revenues while cutting taxes for most Americans. Currently, the rich are facing the lowest tax rates they've seen in 18 years -- which include the boom years of the 90s. They are also making more, relative to the rest of the country, then they have since the Great Depression.

You can raise taxes on the rich while cutting them on the poor and middle class, and so far as most people experience taxation, you'll have just cut taxes. But you'll also be bringing in more revenue. Presumably, the media will call this a tax increase, and Repubicans will certainly call it a tax increase, even though, for most people, it will be a tax cut."

In the short run, a new President Obama will be facing intense pressure to reduce the record deficit, and only a new Congress with lots more Democrats---for better or worse--is likely to return tax rates on the very wealthy to Clinton era levels, when those folks were doing quite well, thank you. So, promises of tax cuts for most Americans in the first year of a new administration by either Obama or McCain continue to warrant strong skepticism.