How Middle-Class Economics Can Save Us From Disastrous Trickle-Down Policy

[xchrom]

http://www.alternet.org/economy/how-middle-class-economics-can-save-us-disastrous-trickle-down-policy

Reaganomics, the plot to appease the rich and condemn the rest, got its comeuppance last week in President Obama’s State of the Union speech.

The President asked: “Will we accept an economy where only a few of us do spectacularly well?”

That’s the trickle down economy he’s talking about. And when he said, “spectacularly well,” that understated the great fortune of the very few. Oxfam, the international federation working to end poverty, reported just before the speech that if nothing changes over the next two years, the top 1 percent will hoard more wealth than that held by the entire remaining 99 percent of humans on earth.

President Obama made it clear he has no intention of accepting such economic damnation for the vast majority of Americans. He proposed an alternative to Ronnie’s scheme. President Obama called it middle class economics. Though its intent is to create opportunity, prosperity and security for the working poor and middle class, it’ll be a hard sell. That’s because Americans have been force fed that voodoo, greed-is-good, grovel-before-the-rich financial philosophy for so very long.

[pampango]

1. "Middle class economics turns trickle down on its head. Instead of focusing on the whims of the

wealthy, middle class economics meets the needs of the majority. It raises taxes on the rich, often by eliminating their lobbyist-purchased loopholes. And it uses that revenue to pay for programs that would broaden opportunity for the 99 percent, including two free years of community college, assistance for child care and help with retirement savings.

This is no killer tax increase on the wealthy. It’s hardly the 90 percent marginal income tax rate charged to the nation’s richest at times in the 1940s and 1950s. This would be an increase from 23.8 percent to 28 percent on capital gains and dividends, the same rate Reagan charged, so it could hardly be gawd-awful.

Meanwhile, the tax rate on those capital gains would increase because, frankly, there’s no reason that a lower rate should be levied on money accrued from sitting on stocks than on wages earned from sweat of the brow.

The revenue raised would be used to pay for programs assisting the working poor and middle class, like tripling the tax credit for young children to $3,000, creating a $500 credit for families with two working spouses and broadening eligibility for the earned income tax credit."