THE BLOG
09/14/2014 06:31 pm ET Updated Nov 14, 2014

Simple Economic Plan That Wins the Midterms: Minimum Wage and Middle Class Tax Cut

"If a free society cannot help the many who are poor, it cannot save the few who are rich." -- JFK, Inaugural Address

Democrats should keep pounding away at the minimum wage, but with the added message that if Republicans are elected, the minimum wage will never be increased. Why? Because right-wing rationale is that the minimum wage is a bad idea. So, why would it become a good idea to them ever in the future?

If they start arguing "not never," the obvious questions are "why not now?" and are you really going to trust Republicans, ever, to champion raising the minimum wage? That is the real "bridge to nowhere."

A minimum wage of $10.10 per hour lifts 5 million people out of poverty, and reduces government spending on food stamps alone by $4.6 billion annually. Invest that $4.6 billion in some infrastructure annually, and the country is stronger, more jobs are created, and people are better off.

Alongside this proposal, Democrats should propose a revenue-neutral middle class tax cut of $350-$400 billion. It should be revenue neutral to prevent muddying the waters by denouncing "increased spending," or "increased deficits." Yes, there are additional needs for infrastructure, but that should not be part of this package, otherwise the clear lines get blurred by the right-wing noise machine, the blurring champions of the world.

The "pay for" is a Wall Street tax, each of tiny percentages, but on massive amounts of money. Depending on assumptions, the Wall Street tax generates $175-$350 billion in new revenue to offset the middle class tax cuts. For those interested, it is a 0.5 percent tax on stock transactions, a 0.01 percent tax on bond trading for each year to maturity and the same on swaps. The calculations of revenue are based on 2008 numbers, so that the revenue collected at the same rates today is likely to be substantially higher. The lower end of the range assumes a draconian 50 percent reduction in trading, a highly unlikely prospect. So, $300 billion is the likely raise from this tax alone.

Taxpayers bailed out Wall Street, and while Wall Street returned most of that money, the American taxpayer saved their lucrative incomes from such productive activities as ultra high-speed computer trading. Do not know how we could survive without that, whereas as teachers, police, firefighters, researchers, construction workers, communications workers, hospital workers... well, what do they do, right?

It is about time that Wall Street started paying us back for the damage they visited upon the economy, including the massive loss of middle class wealth, the wrecked lives, the stunted careers of millennials, the crumbling infrastructure, the budget deficits, and so forth.

We would add to that collecting part of the estimated $350 billion in taxes actually owed that are uncollected either due to lobbyist-written loopholes, tax havens, or just avoidance.

Republicans oppose both raising the minimum wage and taxing their owners on Wall Street. To their feigned solicitude for widows and orphans for whom they will shed crocodile tears, claiming they will pay because brokers will pass through these costs, there is an easy riposte: the free market. In a free market, discount brokers will step in to win business by agreeing NOT to pass along any of those costs. Would you not love to hear them explain why the wondrous free market would not compete this "extra charge" to share and bondholders right out of the system?

If the Democrats could stick to those two economic proposals, Republicans would be put in the position of stating publicly what Mitch McConnell told his billionaires in private: we are here for you, and you only.