Yesterday, President Joe Biden penned an op-ed for the Wall Street Journal that outlines his three-part plan to fight inflation. We encourage you all to read it here if you haven’t already.

For today’s Closer Look, we would like to highlight one of the three parts of Biden’s plan that rarely gets the attention it deserves when policymakers are talking about solutions for inflation: taxing the rich.

In his op-ed, Biden declared fighting inflation to be his top economic priority as workers all across the country continue to feel the heat of rising prices at the grocery store and gas pump. The Consumer Price Index did fall last month, but unfortunately not enough to bring inflation down from a 40-year high and ease the economic pain felt all over America.

There are many contributing factors to inflation, but the bottom line is that we are in this mess in large part because aggregate demand has outstripped aggregate supply as the economy rebounds from the pandemic. As economists like to say, there are “too many dollars chasing too few goods,” which has led to backlogs in the global supply chain and increased production costs. A report from the Economic Policy Institute found that 38.3% of the hike in prices can be attributed to supply chain issues.

To cool demand and help ease inflation, economists say that we need to decrease the money supply and increase the economy’s capacity to produce goods, taking on the problem at both ends. However, the correct path to decreasing the money supply does not have to lie in hiking interest rates as the Fed has recently done. While this may be the “standard” solution for fighting inflation, it’s not the right one. Rising interest rates lower the demand for products by making many important financial decisions – like mortgages, car loans, and credit card payments – significantly more expensive for American families. This may address inflation, but it does so by hurting, not helping, average Americans.

There’s another way to fix the problem of “too many dollars” in our economy: tax rich people like us. The Biden plan to tax the rich can decrease the money supply in the economy by taking it from the pockets of America’s millionaires and billionaires. It’s not the only solution, but it can undoubtedly help solve the inflation crisis without really hurting anyone. Take it from us – we can absolutely afford to have our wallets “squeezed” with higher taxes and will want for nothing if and when that happens.

There’s another political upside to taxing the rich: it could help Democrats pass other programs they want, some of which would also reduce inflation by increasing our economy’s productive capacity. Notoriously recalcitrant Senator Joe Manchin of West Virginia claims to be deeply concerned about the federal deficit, particularly in light of a recent report released by the Congressional Budget Office that says the deficit is set to reach unprecedented heights within the next 10 years if laws remain unchanged.

Manchin’s focus on the national debt may be misguided, but if he’s looking to shrink the deficit, there’s no better way to do it than to tax the rich. In fact, he has apparently resumed talks with Senate Majority Leader Chuck Schumer over passing some form of “skinny” Build Back Better plan that includes tax hikes on the rich. We’ll remain skeptical that he’s serious about passing a bill until he actually votes for it, but if Democrats can use his concern for the deficit to pass something that includes tax increases and other important programs, they should do everything they can to make it happen.

As a final point, we want to emphasize the importance of taxing ultra-profitable corporations in winning the ongoing battle with inflation. We think that Biden hit the right note in his op-ed with his call to tax the rich, but he nonetheless failed to call out the critical role that corporate greed has played in aiding and abetting the rise in consumer prices.

The Economic Policy Institute report we mentioned earlier found that no less than 53.9% of the rise in prices can be attributed to fatter corporate profit margins. In other words, the story of inflation in America is not just one of supply chain issues: it is also one of corporations greedily taking advantage of the hype over inflation to raise prices above and beyond what would be necessary to make up for increased production costs. They’re price-gouging the American people because they know they can get away with it. Enacting a windfall corporate profits tax could go a long way in tackling one of the two main causes of inflation and sending a message to corporations trying to swindle the American public.

Inflation unfortunately appears to be here to stay for a while. For now though, it’s some consolation that the President is openly committed to enacting the right solution – taxing the rich – to tackle it. Here’s hoping that Democrats in the House and Senate give Biden a path forward to do it before it’s too late.