February 8, 2013 by David K. Sutton
On The Debt And Deficit, Forget About Shared Sacrifice
A common argument in support of raising taxes on the rich is the idea of shared sacrifice. The United States has a lot of debt, and somebody has to pay for it. And after all, if cuts to programs like Social Security and Medicare are on the table, then how exactly are the rich supposed to sacrifice if not for increased taxes?
Robert Wolf: Why do we need taxes to go up for the wealthy? It’s about having a shared sacrifice.
I’ve hit on this idea of shared sacrifice on this blog before. It makes sense. If the poor are expected to lose government benefits they have paid for, then surely the rich should be expected to pay a little more in taxes right? — Wrong.
Say what? Wrong? Huh?
Yes, wrong I say. I don’t remember who it was, but this morning on Jansing & Co., a guest made a great case for shunning the idea of shared sacrifice — only, it was an even more progressive argument that replaced it. To paraphrase, the guest said, “Why should we expect shared sacrifice when the economic gains have only gone to the top few percent?” It really struck a chord when he said it. And so I say no to shared sacrifice.
Robert Reich — As President Obama said in his inaugural address last week, America “cannot succeed when a shrinking few do very well and a growing many barely make it.”
Yet that continues to be the direction we’re heading in.
A newly-released analysis by the Economic Policy Institute shows that the super-rich have done well in the economic recovery while almost everyone else has done badly. The top 1 percent of earners’ real wages grew 8.2 percent from 2009 to 2011, yet the real annual wages of Americans in the bottom 90 percent have continued to decline in the recovery, eroding by 1.2 percent between 2009 and 2011.
In other words, we’re back to the widening inequality we had before the debt bubble burst in 2008 and the economy crashed.
We don’t need to cut Medicare. We don’t need to cut Social Security. We simply need to raise taxes on the people who have benefited during the most recent economic expansions over the past decade, and we need to do it with zeal.