A second area of disagreement also has to do with taxing the wealthy, this time in the form of capital gains, which are disproportionally slanted towards the rich. Those rates would go from 15% to 20%, and eventually to 23.8%.
Read up on the issues from both sides here, here, here, and here. Another excellent resource is the Center on Budget and Policy Priorities, which lays out the argument for how letting the tax cuts expire for the wealthy and extending them for everyone else will reduce the deficit ($300 billion per year), almost universally benefit small businesses, and spur the economy and job growth.
President Obama has come out forcefully with a plan to allow the tax cuts to expire for the wealthy and to extend them for the poor. Here is the best and simplest argument I've seen for his plan, from Salon:
Not only did the wealthiest Americans benefit the most from the anything goes Wall Street boom years, but they paid the smallest price for the economic collapse. While millions of Americans lost their jobs and their homes, they sailed right through. By calling for the repeal of the Bush tax cuts for the wealthy, Obama is putting down a political marker, and declaring that the rich must pay their fair share of the burden. Here's a message anyone can understand: I'm going to raise taxes on the rich and spend money directly creating jobs through infrastructure investments.Remember, even with the expiration of the tax cuts for the wealthy they will be paying a lower tax rate than during the Reagan years, so save the cries of socialism. This country became great because of the work of the lower and middle classes. If we want to regain some of that greatness we have to secure them first by creating jobs and opportunities for them, and this move is a way to do that. We've covered this issue a little bit before here.
Over the past 30 years, however, after decades of convergence in income distribution, the gap between the rich and poor is getting bigger and bigger. That means America is less free because those poor have fewer and fewer meaningful opportunities to make their lives, and the lives of their families, better. It also means America is much less righteous. That might seem like a statement out of crazy land, but look at these principles from the Book of Mormon:
2 Nephi 9:30 - But wo unto the rich, who are rich as to the things of the world. For because they are rich they despise the poor, and they persecute the meek, and their hearts are upon their treasures; wherefore, their treasure is their god. And behold, their treasure shall perish with them also.
2 Nephi 9:42 - And whoso knocketh, to him will he open; and the wise, and the learned, and they that are rich, who are puffed up because of their learning, and their wisdom, and their riches—yea, they are they whom he despiseth; and save they shall cast these things away, and consider themselves fools before God, and come down in the depths of humility, he will not open unto them.
Jacob 2:13-14 - And the hand of providence hath smiled upon you most pleasingly, that you have obtained many riches; and because some of you have obtained more abundantly than that of your brethren ye are alifted up in the pride of your hearts, and wear stiff necks and high heads because of the costliness of your apparel, and persecute your brethren because ye suppose that ye are better than they. And now, my brethren, do ye suppose that God justifieth you in this thing? Behold, I say unto you, Nay. But he condemneth you, and if ye persist in these things his judgments must speedily come unto you.
Helaman 6:17 - For behold, the Lord had blessed them so long with the riches of the world that they had not been stirred up to anger, to wars, nor to bloodshed; therefore they began to set their hearts upon their riches; yea, they began to seek to get gain that they might be lifted up one above another; therefore they began to commit secret murders, and to rob and to plunder, that they might get gain.
3 Nephi 6:10-12 - But it came to pass in the twenty and ninth year there began to be some disputings among the people; and some were lifted up unto pride and boasting because of their exceedingly great riches, yea, even unto great persecutions; For there were many merchants in the land, and also many lawyers, and many officers. And the people began to be distinguished by ranks, according to their riches and their chances for learning; yea, some were ignorant because of their poverty, and others did receive great learning because of their riches.
There are many, many others just like this. One of the overarching themes of the Book of Mormon is that when a society becomes stratified between the rich and the poor, the rich will become prideful and wicked and push the poor down further and further until they are ripe for destruction. This is where we are inevitably headed unless we make the decision, as a society collectively, to narrow that gap voluntarily. Extending the Bush tax cuts for the poor and letting them expire for the wealthy is a step in the right direction.