Punish less, persuade more

Liberal Democrats spent last week decrying the spinelessness of Barack Obama because he cut a deal with hated Republicans by which rich people will not pay higher taxes.

There are two basic elements that are fatally flawed in what these liberal Democrats are doing.

One is that liberal Democrats exist in a declining minority in American politics and simply cannot succeed in a sustaining way unless they compromise.

They can elect a president only if the Republicans are as inept as Ford, both Bushes and McCain. Then that president will fail if he feels obliged to play to the liberal base.

That president will either fade to ignominious defeat, like Carter, or reconstruct himself by getting a right-wing adviser to help him "triangulate," like Clinton.

Obama awaits one of those fates.

The second fatal flaw is that liberal Democrats do not know how to sell a policy even when they are right substantively, perhaps because they are more interested in being punitive than in explaining essential fairness and wisdom.

Liberal Democratic rhetoric in recent weeks has been that people with incomes exceeding $250,000 a year ought to be the only ones paying higher taxes merely because the rest of us do not like rich SOBs and want to punish them.

That debases political debate. It is governing by grudge.

There are two credible, defensible and persuasive arguments for taxing highest-income people at the highest rates.

One is that they can afford it because they have so much more money to spare. You take a guy making $50,000 a year and tax him at 36 percent and he has $32,000 left to pay his bills. You take a guy making $1 million a year and tax him at 36 percent and he has $640,000 left to pay his bills.

The guy making $50,000 sweats his checkbook balance. The guy making $1 million sweats only if he is spectacularly irresponsible.

Second, you do not raise much money toward reducing the deficit by a nickel-and-dime tax policy on the fellow sweating his checkbook balance with an income of $50,000 a year.

But persons making more than $250,000, only 2 percent of the taxpaying public, already pay more than 40 percent of our taxes. You jack them up a little more and suddenly you have generated hundreds of billions of dollars toward deficit reduction.

You tax the rich more because that is where the money is and they can spare it.

This is not confiscation. This is not a fine. It is common sense.

Would you rather be the $50,000 earner without a tax increase or the millionaire with one?

Here is a deal for you: Give me $1 million and I will voluntarily remit federal taxes at the rate existing before the Bush tax cuts.

The best Republican argument against this simple math and this simple logic is that high-income people, by having extra money to invest, create jobs for the rest of us and therefore might create fewer jobs if more of their money goes to slightly higher marginal tax rates.

But that suggests the millionaire will decline to pursue enriching investments if his tax rate goes up a couple of percentage points.

I have another deal for you: Give me $1 million and I'll pay the higher taxes and invest in a business.

The Republican argument also is not supported by the record. Clinton raised high-income taxes as part of his deficit-reduction plan in 1993. The rest of the '90s was marked by a thriving economy and budget surpluses.

Maybe you think Clinton was simply lucky. Even so, you are essentially acknowledging that economic growth gets influenced by factors transcending marginal tax rates on high incomes.

Less punishment and more persuasion -- that's the ticket.

John Brummett (jbrummett@arkansasnews.com) is an award-winning columnist for the Arkansas News Bureau in Little Rock. His telephone number is (501) 374-0699.