economy – Jason Crane

Labor writer and activist Jonathan Tasini

Jonathan Tasini has written a simple and compelling piece about NY Gov. David Paterson’s call for pension givebacks for state employees. Here’s the core of Tasini’s argument:

We could wipe out the budget deficit–or, certainly trim it down to something trivial–by raising taxes on the very wealthy and going back to a more progressive taxation system that we had in the 1970s. You know this: if the state replaced the existing rate structure (consisting of 5 brackets with rates ranging from 4.0 to 6.85%) with one consisting of 14 brackets with rates ranging from 2.0 to 15.0%, we could bring in $6-7 billion more, and perhaps as high as $11 billion.

Under this plan, 95 percent of the stateâ€™s taxpayersâ€”95 percent of the peopleâ€”would receive a tax cut. Like the proposals championed by President-elect Barack Obama, a more progressive taxation system would be easing the burden on the people who are the most at risk in our economically troubled times. The top one percent of taxpayersâ€”whose average income is $2.685 millionâ€”would see their taxes go up about 5.4 percent. The four percent below that top one percentâ€”those people whose average income is $326,000â€”would have their taxes rise 1.4 percent.In fact, the top five percent would have their dues burden slightly reduced because higher state taxes would lower their federal obligations.

Everyone else would realize a reduction in their taxes.

I highly recommend the rest of the article, too.

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From today’s New York Times:

Mr. Summers has spent much of his career tweaking fellow liberals with arguments he considers unpleasant truths â€” on the dangers of budget deficits, the benefits of capitalism and other subjects. But he seems to have decided that conservative orthodoxies have become a vastly bigger threat to good economic policy than liberal ones. His favorite argument today is one that instead drives some conservatives nuts.

It goes like this: To undo the rise in income inequality since the late â€™70s, every household in the top 1 percent of the distribution, which makes $1.7 million on average, would need to write a check for $800,000. This money could then be pooled and used to send out a $10,000 check to every household in the bottom 80 percent of the distribution, those making less than $120,000. Only then would the country be as economically equal as it was three decades ago.

Read the rest of the story.

Tag: economy

Tasini to Paterson: Are you insane, Dave?

Larry Summers on spreading the wealth