A proposal to impose a federal tax on revenues from municipal bonds would be a destructive and unconstitutional way for profligate Washington to raise funds. The tax would deter investors and squeeze cash-strapped states and cities like Detroit. Americans would pay the price.
Detroit's bankruptcy is indicative of not only a failure of political negotiations but also the increasing income disparity in America. In Detroit, wealthier Americans have been able to write off the poor for years, Reich says.