A progressive tax policy and a cut in military spending are what America needs.

To pay for his government programs, Obama supports a progressive tax system, with higher taxes for the rich, and lower taxes for the middle class. The need for such a system of taxing the rich to pay for government services has grown since 1980, when income gains between the rich and the poor began to diverge at a faster pace. [1] Recent data shows this trend continuing: in 2011 the wealthiest Americans got richer while median income fell by 4%. [2] Despite these trends, the top marginal tax rate is at nearly an all-time low! [3] Increasing tax on individuals who earn more than $250,000 and even more for multi-millionaires because the marginal utility of wealth is lower for the super-rich than it is for the poorer. In other words, a millionaire is not particularly worse off if he or she is worth $10 million instead of $15 million. $5 million when spent on welfare programs such as pensions, education, healthcare or housing produces vastly greater utility. We thus see how a progressive tax system ensures a more efficient management of wealth across the economy. Obama proposes to rake in more government revenue by raising the top marginal tax rate and instituting the Buffet Rule (a stipulation in President Obama’s plan which would apply a minimum tax rate of 30% to individuals making over $1 million per year). Crucially, Obama plans to continue to cut taxes for the middle classes in order to increase their purchasing power and stimulate the economy. [5] As the 2012 presidential election approaches, President Obama’s long-term focus has been primarily on decreasing the federal debt, estimated at about $15 trillion. Specifically, Obama’s plan, detailed on his website, targets tax loopholes for households with annual incomes over $250,000, via efforts such as the Buffet Rule, while simultaneously reducing taxes for middle-class families and small business owners. [6] In September, President Obama revealed a plan to reduce the deficit by about $3.2 trillion in the next ten years. [7] This will be achieved through an increase in taxation of the nation’s wealthiest, and cuts in spending to the armed forces – as Obama plans to end American involvement in Iraq and Afghanistan. [1] Centre on Budget and Policy Priorities: “A Guide to Statistics on Historical Trends in Income Inequality”, March 5 2012, http://www.cbpp.org/cms/index.cfm?fa=view&id=3629 [2] Nocera, Joe: “Romney and the Forbes 400”, The New York Times, September 24 2012, http://www.nytimes.com/2012/09/25/opinion/nocera-romney-and-the-forbes-400.html?_r=1& [3] Tax Policy Centre, http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213 , accessed 8/10/2012 [4] The White House, http://www.whitehouse.gov/economy/buffett-rule , accessed 8/10/2012 [5] Politifact: “Barack Obama said he’s cut taxes for ‘middle-class families, small businesses’”, http://www.politifact.com/truth-o-meter/statements/2012/sep/07/barack-obama/barack-obama-said-hes-cut-taxes-middle-class-famil/ , accessed 8/10/2012 [6] Barack Obama Website, http://www.barackobama.com/taxes?source=primary-nav , accessed 8/10/2012 [7] The White House, http://www.whitehouse.gov/omb/budget , accessed 8/10/2012