In yesterday's address President Barack Obama finally demonstrated that he can summon some "audacity of hope" in trying to get the United States out of its current economic crisis. As Jackie Calmes reported for The New York Times, he used the occasion to preview the budget proposal that he will release on Thursday. The most important part of the preview concerned the extent to which the rich and mighty will be asked (obliged?) to carry much of the weight of getting our country out of debt:
The president will propose to tax the investment income of hedge fund and private equity partners at ordinary income tax rates, which are now as high as 35 percent and could return to 39.6 percent under his plans, instead of at the capital gains rate, which is 15 percent at most.
Senior Democrats in Congress joined with Republicans in 2007 to oppose that increase. But with Wall Street discredited and lucrative executive compensation a political target, the provision could prove more popular among lawmakers.
Mr. Obama will also call for letting the Bush tax cuts on income, dividends and capital gains lapse after 2010 for individuals who make more than $250,000 a year. But while the top rate for income would rise to 39.6 percent, the top rate for capital gains and dividends would be 20 percent.
As a candidate, Mr. Obama called for immediately repealing those tax cuts. He decided instead to keep them in place through 2010, as scheduled, reflecting the widespread belief that raising taxes further depresses economic activity.
On his National Affairs blog for Rolling Stone, Tim Dickinson called this "Change We Can Believe In." I prefer to think of it as "the audacity of sticking it to the rich;" but I can understand Dickenson's preference. Even Rolling Stone must be beholden to the rich and mighty in at least a couple of ways. Put another way, it is about time for someone with a higher pay grade, so to speak, to stand with New York Attorney General Andrew Cuomo in declaring (in the language of the Jerusalem Bible translation of the Book of Revelation) that the time for patience with the rich and mighty is over. As Calmes observed, Obama is sure to get some (more than a little, I am sure) pushback from the Congress; but this may be the perfect time to remind every member of Congress just who elected him/her and why he/she was chosen. This is a chance for Main Street to demonstrate that its voice can be stronger than Wall Street's; and I, for one, would welcome Main Street rising to that occasion.