Tuesday, August 05, 2008

How Obama and the Dems are missing the boat on taxes

Our job is to push the Democratic Party to the left. Why is it that the strongest tax proposal we have out there is to simply let the Bush tax cuts for the wealthy expire? The wealthy must pay their fair share!

The Right had the guts to propose and implement an economic policy that on the face of it was absurd: give more money to the rich, and it will eventually work its way back down to all of us. Why can't we on the left propose the opposite: give money to people at the bottom and the middle, and it will lift all boats, eventually supporting the wealthy by ensuring a strong economy?

The Right has imposed trickle down, supply side economics on us for years. Sen. Obama and the Democratic leadership should wholeheartedly, without shame, promote demand side, Rise Up Economics. Refundable tax credits for the poor and middle class, paid for by fair taxes on the wealthy, corporations, and carbon pollution.

It's true that we need to pass the Employee Free Choice Act to make it easier to join a union, and we need fair trade, not "free trade." But the only way to truly ensure economic security for all is through that 60's chestnut, the guaranteed annual income, but new and improved for the 21st Century.

A basic income tax credit of $10,000-15,000 per person would provide a poverty-level income for all Americans, who would then be free to work for whatever they need on top of that.

It would be a permanent stimulus package that working families could count on, ensuring that people have money to spend, fueling the economy and lifting us out of recession.

It would also change work as we know it by breaking the link between work and income. Having a steady source of independent income would give working people the security they need when taking on a boss, organizing to form a union, reconsidering their career path, or deciding to work less.

It would be like a people's trust fund, giving us working stiffs the kind of economic freedom and security that only the rich have now.

The Democrats are seriously lacking in vision, and it is incumbent upon us, the netroots, to push them farther to the left and to articulate a vision of how we want the world to be. For me, eliminating poverty, giving working people the kind of economic freedom and security that only the rich have, and seriously tackling economic inequality is what I want us to do. Rise Up Economics is a vision of the future that does just that.

Of course it's not a silver bullet. We'll still need to make it easier for workers to form unions through the Employee Free Choice Act, change from "free trade" to fair trade, and kick our addiction to oil, among other economic imperatives.

But it would give voters an economic incentive to vote Democratic: it would truly be in their economic self interest in a way that's crystal clear. I think we often lose to the Republicans because they offer something tangible to voters: a tax cut, money back in their pockets. The Dems offer things that in the long run are in voters economic self interest: lower health care costs, a safer infrastructure, better schools. But those are pretty abstract compared to the very concrete proposal of lower taxes right away.

Even the tax credits that Dems propose are small, one-off items: Obama's got a $1,000 energy tax credit to help pay for gas; a "Making Work Pay" tax credit of $500 a person or $1,000 a family; then there's the $500 per child tax credit; there's the bi-partisan stimulus tax rebates of about $600 a pop; and there's little-used and little-understood Earned Income Tax Credit. You need a tax expert to figure it all out. But when the average voter thinks tax cuts or even tax credits, you know they think Republican Party.

We could trump the Republicans with a bold policy of Rise Up Economics, a big bold tax credit that replaces all the little tax credits and makes voters forget the little tax breaks the Republicans offer.

But lacking a grand vision for the American economy -- or even a basic economic philosophy -- the Democratic Party is doomed to failure.

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