A guest essay by Associate Professor and Chair of the Political Science Department DeWayne Lucas appeared in the Democrat and Chronicle Saturday. Lucas wrote about the country’s current economic situation and President Obama’s proposal to tax millionaires.
He writes, “The problem for the President remains: how to get government invested in spurring the economy, as it did during the Great Depression, without sacrificing the safety net necessary for the country’s general welfare.”
The full essay follows.
Democrat and Chronicle
Tax millionaires to pay for job-growth projects
DeWayne Lucas •Guest essayist • September 24, 2011
The Dow just dropped another 300 points. Global and domestic financial experts are predicting that without a dramatic change in world markets, the economic outlook will be dire for years.
U.S. unemployment has stalled at 9 percent, with African-American unemployment rates reaching all-time highs approaching 20 percent. While President Barack Obama’s stimulus plan had reversed the losses of the previous administration, it lags behind the requirements for a full recovery, and recent job numbers suggest that the recovery may be slipping. The necessity for a radical and broad-based economic solution to this economic catastrophe has become painfully obvious to households worldwide. The calls for President Obama to do more to spur job growth likewise have increased exponentially.
Despite these painful realities, the reaction of the American political system has been woefully slow and tepid. At the heart of this response has been the political reality of the limitations imposed by a divided government and the cultural and political war that pulls us apart.
While one side of this battle makes a historical and programmatic argument for the need for direct governmental intervention, the other insists on two limiting and competing political constraints. In near defiance of political and economic history, they insist (1) that new government spending be balanced with either spending cuts or tax initiatives and (2) that net tax increases are off the table.
The problem for the President remains: how to get government invested in spurring the economy, as it did during the Great Depression, without sacrificing the safety net necessary for the country’s general welfare.
Obama’s most recent solution is to seek a tax initiative with a minimal economic impact and the greatest potential yield: a tax on millionaires and corporations that would help offset the costs of funding projects that he believes will help in job growth.
While many doubt the likelihood of passage, especially in the House, the real question is what other options are available to the President.
The evidence is clear that government-initiated spending and economic projects have a far stronger impact on economic recovery than cutting taxes and spending. If the President must offset a robust jobs agenda with budgetary considerations, it is far more beneficial to the economy that the revenue come from those who are benefiting from the economic situations than from those already crippled by it.
Lucas is associate professor and chairman of the political science department at Hobart and William Smith Colleges.