As we approach the fiscal cliff, it would be nice if Congress and the president could strike a compromise that puts us on a sane fiscal path. But I’m not seeing it yet.
The House of Representatives could show it’s serious about this in several ways. For example, they could adopt the Bowles-Simpson plan. They could raise eligibility ages for entitlements, adopt means testing for entitlements, close loopholes, put a ceiling on deductions for the wealthy, and adopt a comprehensive and affordable health plan to replace ObamaCare (e.g. by reforming Medicaid and Medicare). This is a great time for the House to show leadership, and to impress upon the president that the House does not have to authorize one cent of revenue if the president refuses to honestly address the country’s financial crisis.
As for taxing the rich, there are two general uses to which wealthy people put their income. First is savings, investment, business expenses, and the like. Second is spending to support and enhance their standard of living, e.g. for food, clothing, shelter, education, travel, luxuries, et cetera. I think it’s only the latter stuff that the president feels vengeful about, so why try to raise tax rates on the former? I’m not an economist, but this seems like common sense.