January 11, 2008

"I think we're slipping toward a recession. A couple of people that I met on the street, they work in construction. They tell me it's slowed down."

Economic analysis, campaign style. That one's from Hillary Clinton, but it's not as if they don't all spout nonsense like that.

116 comments:

Doyle said...

This might be unscientific, but it's at least true.

The same cannot be said for McCain, Rudy, or any other of the supply-side snake oil salesmen who say that tax cuts pay for themselves.

That's the idea that enabled the disgustingly regressive Bush tax cuts, which they all (now) defend and promise to extend.

Reporters should do a better job pointing out that this is utter hackery that NO real economist (including those in the Bush administration) believes in.

Roger said...

It isnt just HRC--and I can forgive a candidate for that kind of "analysis." MSMDS follows: the MSM has been trying to talk the country into a recession for the last year--Proof for my hypothesis? do a word count on "recession" from any NPR transcript from Morning Edition or ATC.

Having said that it, and given the pattern of the business cycle, it looks very much like the "Bush economy" is going to be very parallel to the "Clinton economy." The Clinton economy slid into recession in his last year, due in large measure to the dot com bubble bursting. It is possible the Bush economy could slide into recession in his last year due to the housing bubble bursting.

For the record: the president does very little to control the economy, either democratic or republican.

An Edjamikated Redneck said...

Roger I would agree that no president can claim credit for a good economy, but sure can be blamed for a bad one.

A good economy is a matter of staying out of the way and hoping for the best; a poor economy is when the government decides they must act, and it seldon goes well.

Doyle said...

Roger:

During the Clinton years, the median household got much wealthier in real terms than it did during the Bush years.

Whatever caused the disparity, the economic growth of the Bush years was much more heavily concentrated at the high end of the income scale.

Oil prices are a bum rap on Bush though, I'll grant you that. Fortunately Rudy Giuliani has a plan to stop us from consuming oil, which is by definition foreign since we produce almost none.

Doyle said...

A good economy is a matter of staying out of the way and hoping for the best

Just like Herbert Hoover.

FDR, by contrast, was a disaster. All those highways, bridges, and power plants. What good was that stuff? Better people starve than be given government jobs.

Roger said...

No real economist.... Hmmm, the "no true scotsman" fallacy strikes again. Very clearly tax cuts do not always pay for themselves..If you followed that logic there would be no taxation at all. That's something the Laffer curve demonstrates. What reputable supply side economists suggest is that there is indeed a point where increasing tax rates will restrict economic growth--again, a prediction of the Laffer curve--a tax rate of 100% would give people no incentive for working. Further, there is some research on non-US economies that suggests it is a tax rate greater than 40%. But the rate would vary country to country, and be largely affected by the underlying business cycle.

dax said...

A funny thing happened on the way to the treasury, Doyle.
Every time tax cuts have been enacted the economy surges and federal coffers swell.
It's that pesky little thing called..............history.


GOD SAVE THE AL

Roger said...

Doyle: I didn't realize you were a Keynsian economics! might want to check your economic history of the US--all of Roosevelt's programs did little to pull us out of the degression; Look at the unemployment rate at the beginning of WWII, which if memory serves was nearly 20%. While Roosevelt's programs were valuable in terms of raising public support, the American economy didn't take off until wartime production cranked up.

Roger said...

Correction on unemployment rate: 14.6% for persons 14 and older in 1940. (damn memory)

Middle Class Guy said...
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Middle Class Guy said...

Construction? Slowed down? In winter? I guess we are in for a long haul recession bordering on depressive insanity.

Fred said...

Merrill Lynch says the recession is underway.

Middle Class Guy said...

The Clinton economy slid into recession in his last year, due in large measure to the dot com bubble bursting

The Clinton tax hikes on everyone had nothing to do with it right? Less money in peoples pockets, less money for necessities and less disposable income over time had nothing to do with the economy tanking?

The economy is more than the stock market. It is also about real people and THEIR money.

Roger said...

Fred: we'll see if ML is right in two quarters.

Middle class guy: The dot com thing wasnt about the stock market. Like the housing situation, the underlying issue was where capital was going and the bubble creating the illusion of wealth with no underlying value--when the bubble bursts, there is far less REAL capital to fund the things that contribute to economic growth. Similarly the housing bubble except the capital went to buy lousy mortgage instruments rather than lousy companies.

An Edjamikated Redneck said...

Anothe rpart of the dot-com bubble was Y2K,

IT spending in 1999 was about 10 times what it was in 2000-2002. It may not have been a prime factor in the recession, but it was a factor.

I am also reminded of teh old joke abouthe difference between a recession and a depression- A Recession is when your neighbor is unemployed; a Depression is when you are unemployed.

Based on this definition, we are in neither.

hdhouse said...

I love it. The rich people feel no pain so there is no recession because they feel no pain. Larry Kudlow feels no pain so there is no recession.

I admire the 1% who project the feelings of the 99%.

Roger said...

Redneck: apropos your joke: considering Merrill Lynch is having to write of some 15 Billion in bad paper, no wonder they are predicting a recession--they are in one now!

mcg said...

Pain does not a recession make. Nor does knowing someone who is having economic troubles, either. GDP growth in Q3 was 4.9%, and people were in pain then too, right?

Hoosier Daddy said...

The same cannot be said for McCain, Rudy, or any other of the supply-side snake oil salesmen who say that tax cuts pay for themselves.

Exactly which is why we all need increased taxes so more of my money goes to the government rather into the economy. That'll fix everything.

jeff said...

Weird. I came into work today and everyone here has a job. A well paying one at that. Some recession.


"That's the idea that enabled the disgustingly regressive Bush tax cuts, which they all (now) defend and promise to extend."

Yeah, it's a real bitch when tax cuts target the people who actually pay most of the tax. Disgustingly regressive indeed.

Icepick said...

Prof. Althouse, I think you missed the truly interesting part. Apparently, Hillary believes that the laws of the nation no longer apply to women:

A man shouted through an opening in the wall that his wife was illegal.

"No woman is illegal," Clinton said, to cheers.

the wolf said...

My wife (a woman, not illegal) just got raises. The economy must be gangbusters.

SteveR said...

Doyle: Fortunately Rudy Giuliani has a plan to stop us from consuming oil, which is by definition foreign since we produce almost none.

In 2006 the US was third in production although we still need to import about 60% of what we consume. Just sayin'

john said...

Doyle,

It's tough when facts get in the way of polemics. The US is still producing about 39% of its oil. The mideast region only supplies about 19% of our oil needs. The rest comes from Canada, Mexico and Chavez.

HDhouse: Are you on unemployment? You have a lot of friends here, we could take up a collection. Maybe we would collect enough for some of your out of work neighbors too.

john said...

Oops, Steve. Looks like great minds think alike. Or alike minds think alike. Or something like that.

rhhardin said...

Recessions are good. It's how you stop people from doing the wrong things and start people doing the right things.

Unlike governments, which don't have recessions, and so keep doing what doesn't work regardless.

Roger said...

I continue to be amazed that the reality based community, at least as evidenced by some members of that community who comment here, seems to be in command of facts. Damn fact, any way when its feelings that count.

George said...

To say the housing industry has slowed down is like...doh! She's just feelin' the guy's pain, is all.

The Fed's cutting rates again, and Bush and Bernanke are going to do everything imaginable to juice the economy for the next 10.5 months.

The next guy inherits the mess. It's the American way.

john said...

HDhouse -

I was only kidding! Things are financially a bit strapped around here too, since we got the HD TV for Christmas, an ipod and a new digital camera. And now, with estimated taxes coming up in 4 days, and my income increasing, I'm afraid the hit is going to hurt the ole pocketbook for awhile.

Try me again after April 15, OK?

An Edjamikated Redneck said...

Roger; Re Merrill Lynch- Ya live by the paper fortune, ya die by the paper fortune.

Who thought it would be a good idea to count as good funds the payments on loans from folks with poor credit ratings?

I'm not saying the sub-prime market shouldn't exist, but it shouldn't be sold to both consumers and lenders by snake-oil salesman mortgage brokers.

Trooper York said...

Wsaaaittt a minute. I just bought a bunch of tulips from Merrill Lynch. Do you think I have a problem?

Ann Althouse said...

Icepick, I saw that but I don't find it interesting. It's a standard rhetorical point that human beings can't be "illegal." They may be doing some illegal things, but they are not themselves illegal. Yes, it gets cheers, but so what? I've heard this point a thousand times.

AJ Lynch said...

I think Doyle had to go find some ice packs after the way you folks pummeled her re her claim that FDR simply snapped his fingers and poof the depression went away.

Revenant said...

I don't know if we're heading into a recession or not, nor do I much care since there's nothing I -- or Hillary, for that matter -- can do to prevent one or get us out of it faster once it starts.

But whether we are or not, thinking that we are because construction has slowed down is moronic. The construction industry was in its own version of the '90s tech bubble, and it burst a while back. Obviously things in that industry are going to slow down! That doesn't mean the economy as a whole is going to experience negative growth.

Revenant said...

Yeah, it's a real bitch when tax cuts target the people who actually pay most of the tax. Disgustingly regressive indeed.

What's more amusing about HD's hissy fit is that a "regressive tax cut" would be one in which the rich got smaller tax cuts than the poor.

Roger said...

Rev: you don't understand. HRC can't repeat 1992 unless the democrats can assert we are in a depression, the worst economy since Herbert Hoover, and it's the economy stupid. HRC has the crying/lip biting and the comeback kid thing already checked off. Sharpen up, Rev!

Steven said...

This is a serious question: can one of the people who feels that the income tax structure we have today is not progressive enough tell me what percent of the total income taxes collected they feel should be paid by the people with the top 1% of all income tax returns (by income)? What percent of the total tax burden should the top 10% pay? How much should the top 25% pay? And how much should the top 50% pay? I'm genuinely curious to see what you think would be sufficiently progressive.

An Edjamikated Redneck said...

Why should there be a percentage difference?

Given a base deduction for family size and then 10% of the balance.

Granted, lower incomes may pay nothing, and higher incomes will still pay more, but not proportionally more. The only sticker is how much th estandard deduction should be; $25k for a household of 2 and $7k for each additional member? Family of four has a income of $39,000 before they need to pay a dime to the Feds?

One beef I have with most Tax Reform plans is they start from revenue neutral; I say we start with what the people need and the government needs to survive on the income, just like everybody else.

SGT Ted said...

A couple of people I met in a bar last night thought Hillary Clinton shouldn't be President. So, I think Hillary should withdraw from the race.

Middle Class Guy said...
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Middle Class Guy said...

Steven asks what percentages people in different income classes should pay.

First, let us eliminate the income redistribution scam from the equation. Income is never redistributed through taxation.

All people should pay the same percentage roughly 15% of gross income- this is what we all strive for when we pay to have our taxes done. This is fair, it is equal, in is non-punitive, and it is not oppressive. All income classes are taxed, even the poor. No deductions, tax credits, or other frauds. We are all treated equally and fairly. The way our government is supposed to treat the people.

Only businesses and corporations should be held to GAAP standards. There should be a different tax structure for them, as taxes are based on profit.

chickenlittle said...

"During the Clinton years, the median household got much wealthier in real terms than it did during the Bush years."

I just don't care about the median. I'm better off under Bush than Clinton, though I'm older too.

Roger said...

Congratualtions Sgt Ted: you are know Pundit first class Ted

Middle Class Guy said...

Unlike governments, which don't have recessions, and so keep doing what doesn't work regardless.

Government can raise taxes, print more money, or borrow it. They have the advantage.

althouse too said...

Amazingly, the bottom 50% pay only 3% of the federal taxes. Their incentive is therefore to vote for the person who promises them the most stuff, since they do not have to pay for it. Other people do. Then, the left sided politicos convince them that the "rich" are not paying their fair share, so they get the votes, raise taxes and can then afford to give them the stuff they promised. What a racket! Since the top 1% pay 39% of the federal tax, tax increases on them have a disproportionately negative effect on the economy as a whole, and tax cuts the opposite. Yet, because they are such a small voting block (and now more than 50% democratic) they are an easy target.

Bloggers note: I am not in nor will I ever be in the top 1%.

jeff said...

I accept that I have to pay taxes and I accept, if not agree with, that as a single person who rents, I have to pay more taxes. I also think everyone should pay taxes. The trend seems to be the lower 1/2 of the population (not me) wants the upper 1/2 (me) to pay more and more of my income, and essentially vote themselves tax free. Once they no longer pay taxes, then keeping government spending down isn't really their concern. Free insurance for all? Sure why not. Free child/teen/adult care for life? You bet. Just raise the tax on the rich. The main reason I push for tax cuts isn't necessarily because I think taxes are too high (although I do) or because I think tax cuts stimulate the economy (although I do), but rather if the Democrats are busy fighting lowering my taxes, they are not raising them.
If I could pass only one law, I would outlaw withholding. Everyone writes a check on 4/15.

Crimso said...

"And how much should the top 50% pay?"

Given that I am barely in that top 50% (and it only took 17 years of education and postdoctoral training after high school to reach that 50% mark), I firmly believe that I should pay no taxes, and anyone making more than me should. Or we could just all get together and decide to impose a 100% tax rate on all of say, California. Tyranny of the majority.

Paul said...

You may have heard this quote:

"When the thirteen colonies were still a part of England, Professor Alexander Tyler wrote about the fall of the Athenian republic over two thousand years previous to that time:

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasure. From that moment on the majority always votes for the candidates promising the most money from the public treasury, with the result that a democracy always collapses over loose fiscal policy followed by a dictatorship.

The average age of the world's great civilizations has been two hundred years. These nations have progressed through the following sequence: from bondage to spiritual faith, from spiritual faith to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency from complacency to apathy, from apathy to dependency, from dependency back to bondage."

Alexander Tyler


The left's totalitarian impulses will be well served under this scenario. It's a mistake to think they care more for the economic well being of the nation than for power and control.

Doyle said...

Amazingly, the bottom 50% pay only 3% of the federal taxes.

Amazingly, this has more to do with what % of the national INCOME the bottom 50% receive than the terrible burden being placed on the rich.

Doyle said...

Note: Ann is a Democrat except on foreign policy and domestic policy.

althouse too said...

Paul- that is exactly right. The trick is that we are not a democracy, we are a republic. This was the intent of the framers to prevent a tyranny of the majority. That is why the constitution started with no income tax and we did not originally elect the senate. Ingenious checks and balances which have been eroded by amendments which are perhaps too easy to pass have systematically gone by the wayside. What amendments have missed, the courts have taken care of. I feel we are doomed to become a democracy.

althouse too said...

Paul- that is exactly right. The trick is that we are not a democracy, we are a republic. This was the intent of the framers to prevent a tyranny of the majority. That is why the constitution started with no income tax and we did not originally elect the senate. Ingenious checks and balances which have been eroded by amendments which are perhaps too easy to pass have systematically gone by the wayside. What amendments have missed, the courts have taken care of. I feel we are doomed to become a democracy.

Middle Class Guy said...
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Middle Class Guy said...

power and control

It is all about power and control. The Romans used bread and circuses. The Democrats use womb to coffin entitlements.

If you control the money you control the power.

Middle Class Guy said...

Or we could just all get together and decide to impose a 100% tax rate on all of say, California. Tyranny of the majority.


Since California does not act like they are part of the union, I say we tax one hundred percent of their income, confiscate and sell all private property, and then when they are finally crushed, we give them back to Mexico.

AJ Lynch said...

Doyle said:

"Amazingly, this has more to do with what % of the national INCOME the bottom 50% receive than the terrible burden being placed on the rich."

Doyle, you used the word "receive" as if income distrubution is some grand & pernicious scheme and that is the cut of the national pie that was doled to the bottom 50%. Was your choice of words a Freudian slip ?

I would have used the word "Earned" as that denotes what Americans are paid in return for their efforts.

Let's face it libs like you will never be happy with how wealth is achieved and who becomes wealthy. You thing the game is rigged and you are a bitter and sore loser.

Paul - great quote - I will borrow it because you can learn something new everyday!

althouse too said...

Doyle- With the exception of the 10% or so who have mental or physical impediments to earning more money, most of the bottom 50% are there as the result of various choices they have made, or their position of just starting out in their career or business. Why should anyone who has worked hard, borrowed oodles of money to go to school, or just been outstanding at their chosen business or profession have a responsibility to support people who chose not to do these things? Why should they have to devote a larger amount (not percentage) of their income to purchase the same food or television? There can be no fairness when incomes, taxes, etc are viewed as a zero sum game.

Paul said...

althouse too,

I guess that's why they're Democrats and we're Republicans, eh? What's worse is that modern day Democrats are really just socialist-collectivists and are thus closer to totalitarianism than libertarianism right out of the box, albeit "soft" nanny state totalitarianism. Either way it's serfdom and retards healthy development at the level of the individual and thus dooms society.

Roger said...

althouse too makes a great point IMO--if we had a class structure into which people were born and had to remain there would be some for concern. But it isnt like that--the income distribution reflects choices, where people are in their lives, and omits wealth from the equation. It also overlooks interclass mobility. If the same people were always in the bottom 50% that would be one thing--but they are not. When Doyle wonders why there are republicans, he forgets the best way to make republicans is to let poor democrats get rich and start paying taxes. World looks a lot different then.

Too many jims said...

"The Democrats use womb to coffin entitlements."

And Republicans? Oh that is right, the only thing that matters about Republicans' fiscal policy is the tax cut side. I've got it now.

I find it hilarious that Republican apologists here blame Democrats for "socialist-collectivist" policies when a Republican President signed a bill passed by a Republican Congress (both House and Senate majorities) which expanded entitlement spending more than any other bill in the last 40 years. That is not even getting into discretionary spending increases (e.g. NCLB) which make Bill Clinton jealous and continuing support for other forms of assinine goverment spending (e.g ethanol).

Steven said...

I was hoping that nobody would quote the actual figures, as "althouse too" did, before one of our liberal commenters could offer up a suggested percentage that would be fair. Knowing what the actual figures are, they are free to simply sneer about the fact that the distribution of income is not perfectly equal, as Doyle has done, without addressing the question of what a "fair" distribution of the tax burden is.

My own experience is that when I ask this question of people who think the tax system is not progressive enough, they are almost always unaware of what the actual distribution of the tax burden is, and the figures they offer up as a suggested "fair" distribution turn out to be less progressive than the reality.

As it happens, the bottom 50% of tax returns, while paying the 3% of total tax that "althouse too" cited (and this is for 2005), accounted for 13% of total reported income. Their average tax rate (total taxes paid divided by total income) was 3%. The cutoff income level between the top and bottom 50% was about $31,000. (This is simply based on where the median tax return was -- it is not adjusted in any way for whether the returns were by single or married filers, or for how many dependents the filer had.)

The top 1% of all returns (incomes over $365,000) accounted for 21% of all reported income, and paid 39% of all taxes. Their average tax rate was 23%. The top 10% of all filers (income cutoff: $104,000) had 46% of the total income, and paid 70% of the total tax, with an average tax rate of 19%.

You can argue endlessly about what a fair distribution of income is. But that's really a separate argument from what a fair distribution of the tax burden is. Why is it more "fair" for people who earn 21% of the income to pay 39% of the taxes, as opposed to them paying 21% of the taxes?

Doyle said...

Yes you've all convinced me that the people working two low-paying jobs and making <$50k/yr just aren't as hardworking as upper middle class types like Ann, who get paid to swill Franzia and pollute the internet.

jeff said...

to many jims, sounds like you only read what you want to.

"when a Republican President signed a bill passed by a Republican Congress (both House and Senate majorities) which expanded entitlement spending more than any other bill in the last 40 years. That is not even getting into discretionary spending increases (e.g. NCLB) which make Bill Clinton jealous and continuing support for other forms of assinine goverment spending (e.g ethanol)."

Yes, a huge complaint of mine. A reason why we lost the congress. Something we have rehashed over and over again since the last election. Something we don't want in our next nominee. A reason why we will not be voting for a democrat where this behavior is business as usual. Have you just not been paying attention the last year or so?

"Oh that is right, the only thing that matters about Republicans' fiscal policy is the tax cut side. I've got it now."

Apparently not. Just the first step in our fiscal policy. We had a lot of people forget they were Republicans.

jeff said...

"Yes you've all convinced me that the people working two low-paying jobs and making <$50k/yr just aren't as hardworking as upper middle class types like Ann, who get paid to swill Franzia and pollute the internet."

The question is why are they working two low paying jobs? Are you under the impression that Ann got her JD in a box of crackerjacks and some just picked her house our at random and started sending her checks? Perhaps we found the root of your mis impressions.

Doyle said...

Are you under the impression that Ann got her JD in a box of crackerjacks and some just picked her house our at random and started sending her checks?

You got a better explanation?

Steven said...

Doyle, you're changing the subject. It's not about whether someone with a lower income is working harder than someone with a higher income. Sometimes they are, sometimes they're not. It's about why the person with a higher income should pay a higher percentage of their income in taxes. If you think that's fair, just explain why, without any snide comments.

reader_iam said...

Doyle, are you commenting on company time?

reader_iam said...

(I already assume you'd never be caught dead swilling anything under oh, say, $50 bucks a bottle.)

Roger said...

Reader says: "Doyle, are you commenting on company time?"

Uh oh--the time clock police--I have today off and am commenting on my own time! phew! :)

reader_iam said...

Minor point, but Althouse has explained that she corrects people when they call her "Dr.," and I thought that was because she has never claimed to have gotten a JD, from a CrackerJack box or elsewhere.

I can, of course, be wrong.

Revenant said...

Yes you've all convinced me that the people working two low-paying jobs and making <$50k/yr

A person working two jobs and making less than $50,000 a year is either very young and inexperienced... or very stupid. Plus, of course, the bottom half of the income curve averages to considerably less than ONE full-time job per person.

just aren't as hardworking as upper middle class types like Ann

Earth to Karl Marx: workers are paid in relation to the value of their work, not the physical effort involved in doing it. If you want to earn more money, learn how to do something more useful than mouthing the words "would you like fries with that?".

Too many jims said...

to many jims, sounds like you only read what you want to.

Don't be so sensitive. Maybe you don't qualify as an apologist.

Have you just not been paying attention the last year or so?

I have been paying attention longer than that which is why I was never fooled by the "compassionate conservative" double talk. I just wish more had realized that that term meant "I am for expanding government spending."

reader_iam said...

Roger: No time-clock police here.

Doyle, in context, implied that Althouse's job was, in effect, paying for her to blog. Thus my question to him ... because if he made these comments while at work, doesn't that mean he's likewise, in effect, getting paid for similar activity? I mean, under his own calculation.

A fair question, I think, especially given that a large number of actual low-paying jobs don't afford that opportunity to those who hold them.

reader_iam said...

A person working two jobs and making less than $50,000 a year is either very young and inexperienced... or very stupid.

Now THAT is bullshit, from the other side.

reader_iam said...

C'mon, Rev. Do some math, think of the universe of jobs and, yes, even professions (some requiring higher degrees, even), and think again.

althouse too said...

Neither of my children has any interest in going through life "poor" like their parents. So, they have been busting their butts for years, one now in law school, one heading for medical school. I know people who go to law school at night, MBA programs on weekends, computer technology, whatever. Those who are content with "getting by" at a job that requires little effort do not deserve a pass when it comes to contributing to the common good (Paying taxes). For those for whom "getting by" is the result of their honest best effort, I'm happy to help them.

The US is the world's only country where the poorest people are the most obese!

JackDRipper said...

Well, if the economy is getting bad we'll need the most experienced business man in charge!

Now who might that be? Mitt, mitt, mitt, mitt.........

althouse too said...The US is the world's only country where the poorest people are the most obese!

Maybe, but check out some of the locals in the Polynesian countries. The skinny ones check in at about 225lbs. And the skinny guys are even bigger.

Middle Class Guy said...

jeff said...
"Yes you've all convinced me that the people working two low-paying jobs and making <$50k/yr just aren't as hardworking as upper middle class types like Ann, who get paid to swill Franzia and pollute the internet."


Maybe we should let the government take over everything. Think how happy we would be. We could all get the same minimum wage salary and only union dues will be deducted- the union leaders have to stay employed. We could all live in the same type and size of government housing, we could drive government cars fueled by government gas, we would shop in government stores for our needs, and attend government schools.

Just one big happy class of people. No need for prosperity, opportunity, or upward mobility. Equality for all.

Kumbayah my lord, kumbayah…


BTW, as to pollution, call Al Gore 1-800-lie-tome

Roger said...

reader: point taken.

Crimso said...

"Yes you've all convinced me that the people working two low-paying jobs and making <$50k/yr just aren't as hardworking as upper middle class types like Ann, who get paid to swill Franzia and pollute the internet."

Doyle, I am a tenured associate professor at a large state-owned university in the South. I spent the summer before last (I only have an academic year appointment) working on a framing crew. Because we really needed the money. I don't live extravagantly by any stretch of the imagination (my wife has relatives on welfare living better than we do; they work for cash and obviously don't report it to the government). Have you ever toted wood on a framing crew in the South during the summer (at age 42)? Our household income is just over 50K a year. That might seem princely, but it's not. You can berate AA for her salary all you'd like (and I assume it's somewhat more than mine), but I got tired of the class warfare rhetoric some time around high school. She made her choices, I made mine. I can tell you that compared to my childhood, I do live princely. Compared to my 20's and most of my 30's, I do live princely. Compared to the nation as a whole, I most certainly don't. At no point did I feel the government owed me any more than I got (they probably owed me less).

Freder Frederson said...

Their average tax rate (total taxes paid divided by total income) was 3%.

Of course you are only referring to income taxes, not taxes of all kinds. Social Security taxes and Medicaid taxes are paid from dollar one of income and only on earned income. You stop paying SS taxes around $100,000 and of course neither are paid on unearned income. The burden of sales and other taxes paid at the point of sale (e.g. the federal gasoline tax) also fall inordinately on those in the lower brackets as do most property and state taxes.

When you look at the total tax burden the less well-off are getting off as scott free as you imply.

Freder Frederson said...

Why is it more "fair" for people who earn 21% of the income to pay 39% of the taxes, as opposed to them paying 21% of the taxes?

Because they can afford it and derive more benefits from the society and the money they are taxed is less worth to them.

jeff said...

"Are you under the impression that Ann got her JD in a box of crackerjacks and some just picked her house our at random and started sending her checks?

You got a better explanation?"

Sure. Many years hard work in School and in work. Like the rest of us.

althouse too said...

What benefits do the top 50% derive that the bottom doe not?

jeff said...

"I just wish more had realized that that term meant "I am for expanding government spending.""

Well. We are in agreement on that.

AJ Lynch said...

Doyle:

I refered to you as "her" and Reader referred to you as "him".

Sorry if I erred- I know you are a former student of Ann's and thought you were female.

Crimso said...

"Social Security taxes"

Well, since they get that money back (and not in nebulous services and whatnot, but in real money), it's not really a tax, is it? Or are you suggesting that SS isn't what it was supposed to be? For my entire adult life, I have assumed that SS will benefit me squat. Probably a good assumption.

Crimso said...

"I know you are a former student of Ann's"

And as with the end of "The Sixth Sense," I suddenly see the past much more clearly.

jeff said...

"When you look at the total tax burden the less well-off are getting off as scott free as you imply."

Sure, I wondered when someone would bring those up. So who is more likely to get all of their social security money back? The less well off or those that will be caught in means testing by the time they retire?

"Because they can afford it and derive more benefits from the society and the money they are taxed is less worth to them."

Who says they can afford it? You? How do you become arbitrator of what I can and can not afford? Sure they derive more benefits from society, they earned it. Why should they be penalized for being a high earner?
Who says the money is worth less than them? How do you think middle class becomes rich? They buy stock and they save. By what right does the government determine who values their paycheck more?

jeff said...

Oh forgot. At what percentage do you think the upper earners have paid their fair share?

althouse too said...

Also, for social security, the maximum benefit is attained at a lower income level than the maximum, so the higher income folks are augmenting the benefits of the lower. There is no maximum on the medicare portion. And don't forget that a large number of higher income individuals are business owners and incorporated or not pay double social security and medicare taxes. 15.4% of the first 102,000 is a lot of money on top of everything else.

Steven said...

"Because they can afford it..."

So would it be fair for restaurants to charge people different amounts for the same meal based on what their income is?

"...and derive more benefits from the society..."

In what way? In concrete terms, they derive fewer benefits (i.e., actual transfer payments such as food stamps). Are you saying that somehow they owe their material prosperity to "society," as opposed to their own efforts?

former law student said...

Sorry, but HRC left a gold mine of comments in that interview. When she said, "I feel so strongly that if we don't take care of our children, we don't take care of our future," the reporter should have asked why she let Bill made welfare mothers go to work instead of raising their children.

Clinton implied that Obama's career has mostly been spent running for office rather than governing.

"He was a part-time state senator for a few years, and then he came to the Senate and immediately started running for president," she said. "And that's his prerogative. That's his right. But I think it is important to compare and contrast our records."


Sure. Unlike Obama, HRC was a corporate lawyer, Wal-Mart director, and politician's wife for thirty years. Then she came to the Senate and immediately started running for President. Obama was a community organizer, civil rights and social justice lawyer, then a state and US Senator.

Clinton, who voted to authorize the war in Iraq and now vows to end it, criticized Obama for saying he opposed the war but then voted to fund it. HRC helped get us into this mess. I don't see how she expects cutting off funds to get us out.

former law student said...

Are you saying that somehow they owe their material prosperity to "society," as opposed to their own efforts?

Bingo! The U.S. is the land of opportunity. Try moving to a different society and see how much material prosperity your "own efforts" brings you.

Christians will recall that "And unto whomsoever much is given, of him much shall be required: and to whom they have committed much, of him they will demand the more." More pragmatic people will realize that those who have more have more to lose.

jeff said...

"the reporter should have asked why she let Bill made welfare mothers go to work instead of raising their children."

Why? You think continuing the cycle of dependency is better for the kids?

I strangely agree with the rest of that particular comment.


"Bingo! The U.S. is the land of opportunity. Try moving to a different society and see how much material prosperity your "own efforts" brings you."

Thats pretty much our argument. We want to keep it the land of opportunity, while others want to tax the achievers to death to level out everyones income to make it one of those different societies you talk about. You sure you want to use that to support your point?

Again the question: what % of income do you think would be "fair" and what % of the total income tax paid do you think the achievers should pay?

Revenant said...

Bingo! The U.S. is the land of opportunity. Try moving to a different society and see how much material prosperity your "own efforts" brings you.

That makes no sense.

Obviously there are some societies where it is impossible to enrich yourself through your own effort -- specifically, societies in which groups of powerful, armed people come and take your wealth away from you once you've made it.

But how does it make any sense to say "since in our society groups of powerful, armed people do not come and take your wealth from you, we are going to see to it that groups of powerful, armed people, also known as "government officials", come and take your wealth away from you, because you owe it to us, for letting you live in a country where groups of powerful, armed people don't come take your wealth away from you."

Crimso said...

"The U.S. is the land of opportunity. Try moving to a different society and see how much material prosperity your "own efforts" brings you."

Why didn't I think of that before? The clear solution is to kill the goose that laid the golden egg. I think you have cause and effect reversed.

Steven said...

Christians will recall that "And unto whomsoever much is given, of him much shall be required..."

Let's take Steve Jobs as an example. I imagine that you would say that much has been "given" to him, and so he needs to give a lot back. And as the tax statistics show, the people who make a lot of money do indeed pay a lot of taxes. But I get the impression, perhaps wrongly, that you think this doesn't really square things evenly, that somehow Steve Jobs and others like him have still gotten the better of the deal, that they haven't really given enough back. I don't see it that way.

How did Steve Jobs get all that money? Did someone put a gun to everyone's head and force them to buy Apple products? No. He created a company, from scratch, and produced lots of products that people willingly pay money for. They love the products, and feel that they improve the quality of their lives. What's more, the company employs over 21,000 people, in jobs that would not exist if he hadn't started the company. So I would say that apart from whatever taxes he has paid, he has given an awful lot to society.

Steven said...

And no, I'm not Steve Jobs!

Crimso said...

"And no, I'm not Steve Jobs!"

Good thing, because that SOB owes all of us!

mmacre2000 said...

A man shouted through an opening in the wall that his wife was illegal.

"No woman is illegal," Clinton said, to cheers.

Believing that pander promise requires a willful suspension of disbelief----or a lasting belief in the existence of Santa Claus.

Paul said...

The arguments of the left make more sense if you realize that envy is the real motivation amd compassion a smokescreen. It's easy to discern by the level of vitriol that is ambient on the left.

In other words the emotional response to feelings of envy is a desire to destroy the object of envy. Thus the snark and general nastiness of these folks. Truly compassionate people are as a whole much kinder and more civil.

The live and let live philosophy of classical liberalism tames the natural inclinations of people to envy those better off or more fortunate and to concentrate on bettering their own lot with the hand dealt to them.

By contrast the leveling impulses of the left stoke the fires of envy, and this is well known and exploited by their leaders.

former law student said...

By contrast the leveling impulses of the left stoke the fires of envy, and this is well known and exploited by their leaders.
The fires of envy are most evident in countries with sharp separations between rich and poor, where the rich live in fortified enclaves, and require bodyguards to preserve their lives. Then they are constantly in fear of being betrayed by their body guards.

In contrast, Americans tend to believe we are all in the middle class. But megatrends like deindustrialization, skyrocketing health care costs, and the ratio of CEO pay/worker pay reaching unheard of multiples makes financial security seem impossible to the vast bulk of the population. Gross disparities in income promote envy; leftists merely point these out.

Revenant said...

The arguments of the left make more sense if you realize that envy is the real motivation amd compassion a smokescreen.

It is particularly obvious when you consider how much more frequently you hear statements like "the rich need to pay more" as opposed to, say, "the poor need more help".

jeff said...

"and the ratio of CEO pay/worker pay reaching unheard of multiples makes financial security seem impossible to the vast bulk of the population."

What in the world are you talking about? The ration of what my CEO to what I make might piss me off wondering why we are paying him that much, but it has zero effect on my achieving financial security. There is no relationship between the two. The vast bulk of the population? What do you base that on?

mcg said...

Clearly the solution here is to divert all funds currently used to fight the unsuccessful War on Drugs to wage a new War on Envy.

Revenant said...

The fires of envy are most evident in countries with sharp separations between rich and poor, where the rich live in fortified enclaves, and require bodyguards to preserve their lives.

So your argument boils down to "the third world sucks, so you owe us whatever we want to charge you for living here"? Have you got a real argument, or is that really your best defense of high income taxes?

Also, have you paused for a minute to consider that the income tax taxes *income*, not wealth? It doesn't force people who already have money to pay up -- it just makes it harder for people to accumulate wealth in the first place.

Revenant said...

Gross disparities in income promote envy; leftists merely point these out.

Leftists point it out and cite it as a good thing. What, you knocked up your girlfriend in high school and have a part-time job at Sizzler? Well no WONDER you feel envious of a guy who put himself through college and started his own business! That guy OWES you, my friend!

Obviously envy is human nature. But most moral systems rightly teach that envy is a bad thing, and that the correct solution to envy is "stop feeling envious", not "take from the person you've envious of until you're not envious anymore".

Crimso said...

"Gross disparities in income promote envy"

And envy, being pure, should be addressed so that no one feels it.

Blake said...

Everytime one of these discussions fires up on Althouse, I wait for someone to post...

But it's not faiiiiiirrrrr!

Paul said...

"The fires of envy are most evident in countries with sharp separations between rich and poor, where the rich live in fortified enclaves, and require bodyguards to preserve their lives. Then they are constantly in fear of being betrayed by their body guards.

In contrast, Americans tend to believe we are all in the middle class. But megatrends like deindustrialization, skyrocketing health care costs, and the ratio of CEO pay/worker pay reaching unheard of multiples makes financial security seem impossible to the vast bulk of the population. Gross disparities in income promote envy; leftists merely point these out."

Envy is alive and well in the good old USA, and everywhere else in the world. It's a natural weakness in human beings everywhere and is only tamed by the civilizing effect of the deliberate cultivation of the character traits of gratitude, humility, and the self worth that flows from assuming responsiblity for one's own condition.

Absent that deliberate cultivation human beings naturally succumb to envy and that leads to the hatred and the punitive sentiments that are so prevalent on the left. We see it plain as day and your attempt to sell it as some type of compassionate moral superiority only works in fooling lefties about themselves, which it does very effectively.

hdhouse said...

ahhh kiddies...the rush drugbaugh school of economics must have graduated another class.

i don't suppose it occured to you that the 1% who "pay all the taxes" do so because of the incredible income disparity in this nation. you of course fail to note that in the past 8 years the "middle income guys" have actually lost ground wage wise against an almost nil inflation index.

the lower 50% doesn't pay 3% taxes but that is 3% of the total revenues. they pay taxes like everyone else. they just earn so darn little compared to the 1%.

figures lie. facts don't. liars lie with figures.

Steven said...

Actually, you're wrong. The lower 50% of the tax filers did pay 3% of the total taxes collected in 2005, and their average tax rate (taxes paid divided by total income) was also 3%. Keep in mind that many of the filers in that bottom 50% pay no tax at all, which is why the average tax rate for this group can be that low.

And spare me the condescension. I don't listen to Rush Limbaugh. Yes, it did occur to me that the top 1% who pay 39% of the taxes do so because of the disparity in income. I specifically noted that they earn 21% of the total income, while the bottom 50% of the filers earned just 13% of the total income. But as I said, the question of what constitutes a "fair" distribution of income is a separate argument from what constitutes a fair distribution of the taxes on income. You too are avoiding the question of why it is more "fair" for a group that earns 21% of the income to pay 39% of the taxes than it would be for them to pay 21% of the taxes.

Revenant said...

You too are avoiding the question of why it is more "fair" for a group that earns 21% of the income to pay 39% of the taxes than it would be for them to pay 21% of the taxes.

There is good social utility in having a low (or even negative) income tax at the lower end of the scale, so long as it isn't excessive enough that it discourages people from working their way up the ladder.

B.Q. Political Report said...

Given the fact that the Institute of Supply Management Manufacturing Index fell into contraction along with indicators such as slumping retail sales and slumping home sales, I would say it is fairly clear that the economy will be at the very least entering a period of slow growth.

Mr. Forward said...

Slow growth and high gas prices. That's good news if you are worried about global warming. Right?