As progressives argue for more spending it is also important to explain where we think the money should be coming from to support that spending. The failure to do so is what makes people not want to support progressive’s ideas since most people think we need to have the money before we spend it. Therefore progressives need to offer a revenue plan that will support the spending proposed. We should argue that this spending can and should be supported by increasing taxes on earnings from buying and selling investments rather than on earnings from work. We should spend as much time talking about revenue aspects as we do talking about the spending proposals we want to pass. This is necessary in order to make the spending proposals acceptable to most Americans.
One of the biggest problems with the way our tax code works is that it taxes earnings from wages at a higher rate than money earned from making investments. If this were not the case there would be lots more money available to take care of the problems we have deal with issues like our lack of infrastructure spending.
There is absolutely no legitimate reason to have the tax code set up this way. The argument that some people make for tax code being set up this way is that the money that people use to make investments is earned at some point through work and taxed at that point as well. In reality this is often not the case. Lots of investment bankers and hedge fund managers are taxed as if the money they get is investment money rather than earnings from work. It is also true that lots of rich people make all their money through investments and never work for the money they use to make the investments. In many cases they received it from rich relatives. You could organize a tax system structured this way that would make clear that money working people are saving for retirement or for other important purposes would not be subject to this increased taxation of income from investment. Some of these issues would also be addressed through increasing taxes on inherited income itself in order to make clear that there is a difference between working people’s savings and investments and income are trying to reach.
It is important that in asking the country to spend more money on our priorities that we make a strong case for where that money can come from. If progressives want other Americans to buy into progressive priorities it is necessary to propose a funding mechanism to support this spending. The other important source should be making sure that corporations pay their fair share. There is a belief however that America is less competitive in a global economy because corporate taxes here are higher in other countries, whether or not this perception is true or not it has a lot of traction with the American people so I think you have to argue that you can increase taxes on corporations without actually changing the rate structure. This does seem to be true since despite the high rate structure many major American corporations pay little or nothing in corporate taxes. We need to get rid of the tax breaks that make this possible and thereby make sure that large major corporations pay their fair share and smaller businesses don’t lose out as a result of these changes.
I also think that progressives ought to actually also support the notion that to spend money we need to have that money available rather than continue borrowing more all the time. I don’t understand how people who want the country to spend more money would be so unwilling to talk about the need to raise that money in order to spend it. But that is the position lots of progressives take by failing to ever talk about where the money should be coming from to support the spending. Because there are real answers to these questions it seems like progressives need to address those questions as part of the argument on behalf of the spending.