The following exchange between Barack Obama and a small business owner regarding his tax policy and the concept of progressive taxation should be watched by all because its fascinating and revealing in several respects:

http://www.youtube.com/watch?v=vFC9jv9jfoA

First, I think Obama makes a compelling case for the sensibility and equity of his tax policy and progressive taxation principles in general.

Second, I think this exchange provides great insight into what kind of leader Barack Obama is and how he walks the walk on his promise to elevate the civility and discourse in this nation and rise above politics. In short, he was confronted by a person obviously opposed to his policies and rather than shun him or ignore him or call him names/stupid, Barack engaged him, respected his views and tried to explain in very real concrete ways, ways that the person himself can relate to, as to why his policies were good ones and might in fact be beneficial to the questioner. In the end, even if the man was not converted (unsure), it was clear they both walked away from the exchange better informed and with more respect for each other. Related to the last point, it's a great contrast to how we see the right and McCain/Palin treat their opponents. If a person opposed GOP tax policies, he/she's either ignored altogether or just demonized as a socialist in favor of income redistribution - there is simply no acknowledgment by McCain/Palin that there may be merit to the position or respect warranted. This civility in discourse is something we've seen in all Barack's appearances, including the debates. I do not think we can underestimate how important a "Change" this is and how much further it'll bring us as a nation as we aspire to bridge divides and heal wounds of partisanship.

Third, I think this shows that Barack is not scared to tackle tough issues, where others may run away from these challenges. Dems have often run away from frank discussions of tax policy or arguments for "progressive taxation" because they were afraid of making the case for it. Barack made a good case for it in a realistic context.

I have always thought that Progressive Taxation is a no-brainer for any civilized society that wants to be successful in the long term. I think the struggle has always been over how to frame the issue and explain it in a way that makes sense. As I said, I think Barack did a good job above. But I also think beyond appeals to fairness and equity, another line of argument can be that Progressive Taxation is misbranded as socialism. In reality, it's actually a capitalistic enterprise that we see play out in all walks of life.

One way to think of this and explain it to every day folks is through an analogy to how a sports franchise runs its business - no doubt a capitalistic endeavor. Think of what we see in ticket pricing all over the map. A sports franchise sets its policy with a set budget (expected revenue) in mind. It realizes that some seats are better than others and offer more amenities (better views, more comfort, proximity, etc.). It recognizes that its constituents are not all equally positioned from a financial perspective. It recognizes that if its cost is too severe in either direction, it risks alienating the top or the bottom and losing revenue. It recognizes there is alternatives to doing business with it (cable, other franchises, minor leagues), albeit remote (just like a taxpayer can be potentially disincentivized and choose to do less/no business or take his/her business out of the country - things that are possible, though they require effort). And it's key to realize that this is just illustrative and not meant to be exact, but the counter-argument that one has the choice to say no to higher prices with regard to buying tickets is really not a valid distinction or inapposite here, because just like that - I'd argue that the ones who are complaining (i.e., the rich) do not have to benefit from the great US economy (or make millions of dollars so as to qualify for higher taxes) if they don't like the tax consequences.

The key here is that in every instance, what you see as the solution that emerges is a progressive (not proportional or flat) pricing policy that charges significantly higher prices for the better seats and lower prices for the worse seats so that it can keep these seats affordable for all. A flat rate simply wouldn't work because of the reality that the landscape is unequal. A proportional rate simply won't work for much of the same reason, because too many folks get priced out at the bottom end. So in effect, what you get is redistribution/subsidizing. The pricing is tweaked (by reacting to the market reactions - free market) to hit the spot that you achieve your revenue goal and sell-out the place.

At the end of the day, despite gripes (nothing is ever easy) most recognize the inherent necessity and fairness of this concept in this context - so hopefully they can see the translation.  The tax policy can be likened to this in every respect. The progressive tax rates are tweaked to achieve rates that invite maximum participation and obtain the desired budgetary revenues. The benefit of the bargain is still worth it, and more people get to benefit/participate.