President Obama unveiled his deficit reduction plan this week, which includes about $1.5 trillion in new taxes on the rich. Predictably, Republicans decried the effect that the proposal would have on "job creators". They say that, by raising taxes and decreasing the wealthy person's take-home pay, they will dis-incentivize those efforts and investments of the person. They are absolutely correct in their analysis, which is based on simple supply-and-demand. If you decrease the "price" (take-home income), you get less quantity of the "good" (investing decisions, running companies, etc.) supplied.
Unfortunately, they seem to be unable to apply the same logic to teachers, firemen and police officers. By stripping union rights from these groups, and generally opposing efforts by the Obama Administration to use federal funds to keep them from being fired, Republicans are dis-incentivizing workers who provide these vital services. Just as the economy would be damaged by having fewer "job creators", it will also be weakened by having fewer good teachers.
In determining how to close the deficit, we must, through our democracy, decide how much each of us will contribute in addition to what we already do. Republicans want to exempt a segment of society from contributing, despite their being the segment most able to afford it.
In my next post, we'll discuss the ridiculousness of calling Obama's tax policy "playing to his base" and "giving up on compromise".