See Harold Meyerson’s Washington Post Column Today

This shift from wages to profits is called redistribution. It is the central fact of American economic life. And it is the primary reason that economic inequality in the United States has skyrocketed.

Yet wages, which are descending, are taxed at a higher rate than income derived from corporate profits — capital gains and dividends. Far from mitigating the consequences of this shift, the U.S. tax code reinforces the redistribution from wages to profits. Broadly speaking, it rewards the winners of this epochal shift and penalizes the losers, who are the vast majority of Americans.

The lower tax rates for capital gains and dividends, then, effectively reward offshoring more than work done within the United States, increase economic inequality and deprive the federal government of revenue it will need to support an aging population and meet its other obligations. None of this upsets Republicans, but it would be nice if Democrats realized that these tax breaks undermine everything they stand for.

A tax deal only the ultra-rich could love, Harold Meyerson, Washington Post, today

Yesterday I wrote that I expect the Dems to recapture control of the House in the 2014 election, despite the current extreme-gerrymandering.  I listed reasons why, and noted that while it’s been reported that in order to do that the Dems would have to win nationally, in the aggregate, in House races by between 7% and 8%, they did that in 2006 and 2008; at least that’s what I read recently.  

A main focus of that post was on the importance of ensuring that the public actually understands that “raising the debt ceiling” is not raising appropriations but, instead, simply authorizing payment by the Treasury of already-appropriated expenditures.  

But there are other tremendously important facts that the Dems badly need to tell or explain to the public.  One is something that I was shocked to read a day or two: that Defense Department appropriations have doubled in the last decade, from about $270 billion to (if I recall correctly) about $580 billion–during a decade of dramatic tax reductions.

Another is that the budget deals of the last two years, including the “fiscal cliff” one, coupled with a (however-slowly) recovering economy (fueled partly, at least in the rust-belt Midwest, by the auto-industry bailout), will have reduced the national debt by about $2.7 trillion dollars.  A fourth of that (if I correctly recall the article I read) is from the tax hikes in the fiscal cliff deal.  Y’know, the part of that deal that the Republicans fought so hard against and that most of their House delegation voted against.  The remainder comes from–yup–reductions in federal spending. 

Obama of course will tout the reductions in federal spending, in his inaugural and State of the Union addresses.  He probably also will mention the added revenue from the fiscal-cliff-deal tax-rate increases on the very wealthy.  

But he also needs to point out–to say and then explain–what Meyerson does in his column today.  

Obama, it seems, thinks that explaining anything economics-related to the masses is like explaining rocket science to people like, say, me.  It’s not. He needs to do it.  He needs a speechwriter who, rather than concentrating on writing memorable, lofty lines–the standard job of presidential speechwriters–actually understands fiscal policy and can, and will, craft a speech that explains it in the way some of the best liberal pundits do.  

But if he doesn’t do that, others, I trust, will.  And soon.  They’ll do effectively enough to create a public groundswell that will win the House for the Dems next year.