Obama Proposes Tax Advantages for the Middle Class

There hasn’t been much that progressives have been able to get the last few years, no matter what screaming conservatives say. But now, with the GOP in charge of both Houses of Congress, we’re about to see some serious stuff go down. The GOP agenda is not going to be friendly to the middle class, and Obama appears to marking out the lines. There’s not much he can do, beyond wield the veto, but he can use his bully pulpit to share his ideas — and perhaps raise awareness of what progressives actually want to accomplish (assuming, of course, that conservatives aren’t getting all of their information from doctored versions of the SOTU).

One of the more telling proposals was the President’s proposals for increase tax advantages for the middle class. We already know that tax cuts don’t help the economy, and we also know that a huge wealth gap isn’t good for society and the economy.

We’ve got a shrinking middle class, and that means that there is a very real chance that things will hit the tipping point in a few years. It’s unsustainable for us to have a huge number of “have-nots” struggling to make it — no matter how hard they work — with only a few “haves” living it up at the pinnacle. A smaller middle class usually goes hand in hand with fewer educational opportunities for a wide swath of the population. This works well for those in power, of course. Oligarchs maintain power when the general population doesn’t have access to education, and when the working class has to working increasingly harder just to survive. When your very existence depends on working 60 hours a week at multiple low-paying jobs, it’s hard to get an education or acquire the skills that can move you up the socio-economic ladder.

At least President Obama is proposing some tax advantages for the middle class. Will these tax advantages be adopted? It’s highly doubtful.

But what this salvo does is give progressives something they can point to and say, “We’re trying. We’ve made suggestions. But it’s clear Congress isn’t working for the majority of people.”

The taxes Obama suggested for the wealthy aren’t likely to be that onerous. Most of them can handle a capital gains rate that tops out 28%. Most can also handle paying capital gains, using the original cost basis, on inherited investments. The vast majority of people wouldn’t see tax increases; instead, they’d see tax reductions. And, as long as you aren’t getting all of your news from sources that have long been known to mislead their audiences in ways that no one else does, you can see that the chances are good that most people will benefit if, by some miracle, the President’s plan is adopted. (The only thing I’m not thrilled about is the change to 529 plans. I think those tax benefits should be left alone.)

But it probably won’t be adopted. However, it’s very difficult for conservatives to spin this one their way. They’ll try. And some more lying is likely to be involved. But the truth is that Obama is doing his best to frame the debate, and doing it in a way that should (hopefully) bring out conservatives’ true allegiance to the wealthy, as well as to the large corporate interests that contribute so much to their campaigns so that they can enjoy their comfortable and influential places in Congress.

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