Althouse: "The controversy of the moment involves AOC’s advocacy of a tax rate of 70-80 percent on very high incomes, which is obviously crazy, right?"

January 7, 2019

"The controversy of the moment involves AOC’s advocacy of a tax rate of 70-80 percent on very high incomes, which is obviously crazy, right?"

"I mean, who thinks that makes sense? Only ignorant people like … um, Peter Diamond, Nobel laureate in economics and arguably the world’s leading expert on public finance. (Although Republicans blocked him from an appointment to the Federal Reserve Board with claims that he was unqualified. Really.) And it’s a policy nobody has ever implemented, aside from … the United States, for 35 years after World War II — including the most successful period of economic growth in our history.... [Despite] the constant effort to portray [AOC] as flaky and ignorant... on the tax issue she’s just saying what good economists say; and she definitely knows more economics than almost everyone in the G.O.P. caucus, not least because she doesn’t 'know' things that aren’t true."

Writes Paul Krugman in "The Economics of Soaking the Rich/What does Alexandria Ocasio-Cortez know about tax policy? A lot" (NYT).

From the comments there: "When top rates were high, 70-80 percent, executive salaries were lower, much lower. Why? Companies saw that if they raised executive salaries they would simply be shoveling most of that extra money to the government. They thought they had better uses for it, such as capital investment and better pay for workers. This is yet another way, an indirect way, in which low top rates encourage economic inequality, the bane of our society, today."

280 comments:

1 – 200 of 280 Newer› Newest»

Darrell said...: Combined with Liz Warren's 90% corporate rate, it will be craptacular.; 1/7/19, 10:17 AM
Roger Sweeny said...: Nobody paid those high rates. There are lots and lots of ways to "shelter" income in the tax code. But it made a lot of business for lawyers and accountants. Actually, the complexity of the code still does today. Very few people pay "list price."; 1/7/19, 10:17 AM
Dear corrupt left, go F yourselves said...: We can tax rape ourselves rich.; 1/7/19, 10:20 AM
Seeing Red said...: And it’s a policy nobody has ever implemented, aside from … the United States, for 35 years after World War II — including the most successful period of economic growth in our history.... [Despite] the constant effort to portray [AOC] as flaky and ignorant... on the tax issue she’s just saying what good economists say; and she definitely knows more economics than almost everyone in the G.O.P. caucus, not least because she doesn’t 'know' things that aren’t true."

I wonder why after WWII. So he wants the destruction of Western Europe and Japan or China’s manufacturing potential?

France has something close to that now. How’s that working out for them?

Yellow vests are active and Cali is starting the same thing. The ruras/farmers aren’t taking this lying down.; 1/7/19, 10:20 AM
Limited blogger said...: The government is too big, right?; 1/7/19, 10:20 AM
Nonapod said...: When you need an advocate for something completely economically idiotic, there's nobody quite like good ol' Krugman. I can never decide if he really believes half the claims he makes or not.; 1/7/19, 10:20 AM
Dear corrupt left, go F yourselves said...: Krugman is an economic idiot of the highest order. "experts say!"; 1/7/19, 10:22 AM
Seeing Red said...: I’d be happy to deduct my sales taxes again. And send bibles to Russia.

No one stopped Mr Enron Krugman from opening his checkbook all these years.; 1/7/19, 10:22 AM
Bill, Republic of Texas said...: I say go for it. The upper classes hate the deplorable and don't want anything to do with them or their icky policies of immigration control, gun rights and traditional values.

They voted for the leftist and socialist. Let them pay 70% tax rate with limited deductions. Give them what they want. Giid and hard.; 1/7/19, 10:23 AM
rhhardin said...: Rich people having money is a plus, not a minus, for the poor.

They can't spend it all -- their standard of living is completely unaffected by their income -- so they invest the excess. Capital is extra money, and only the rich have extra money.

Investment raises the productivity of the poor, and that raises the wages of the poor.

Think of it as the rich having the seed corn. You don't distribute the seed corn to the masses to eat lest everybody starve next year.; 1/7/19, 10:23 AM
Bill, Republic of Texas said...: This comment has been removed by the author.; 1/7/19, 10:23 AM
Bay Area Guy said...: Look, let's test her theory. Let's start with NY.

Raise the state income tax to 70-80% and let's see what all those rich New Yorkers do and how it impacts the middle class and working class.; 1/7/19, 10:24 AM
RBE said...: Did those high tax rates encourage the benefits instead of pay trend? Is this one reason that health insurance rates became so inflated?; 1/7/19, 10:24 AM
daskol said...: If you drive a car, I'll tax the street
If you try to sit, I'll tax your seat
If you get too cold, I'll tax the heat
If you take a walk I'll tax your feet...

Is our society's problem really insufficient social engineering driven by our tax code? It's not that AOC's tax plan is crazy, just that it's reflective of a perspective in which the govt is best at guiding the spending decisions of American people and companies. You don't have to be a doctrinaire libertarian to be suspicious of that proposition.; 1/7/19, 10:24 AM
Hagar said...: Owners and companies found other ways to compensate themselves, which did not count as "income," and much investment was diverted to completely worthless or actually harmful activities.; 1/7/19, 10:24 AM
JT said...: "Nobody paid those high rates. There are lots and lots of ways to "shelter" income in the tax code."

There WERE lots of ways to shelter income in the tax code. At least, a lot more than there are today. Over the years many shelters have been stripped out since the rates were reduced so drastically. There still are ways to reduce the taxes owed, but if the socialists (i.e. Democrats) get the tax rates back up to where they were before Reagan's tax cuts you can bet they will not allow new shelters to come with them.; 1/7/19, 10:25 AM
Dear corrupt left, go F yourselves said...: The fun part - Do you actually think the progressives in congress would ever actually punish the very people who are mega donors to THE PARTY?

No way.

Do you actually buy into the notion that the demcoratics will follow thru with a major 70%-90% tax on billionaires like Warren Buffet, Ted Turner, The Twitter guy, The Apple people, the Facebook people, Tom Steyer, The Hollywood billionaires, and all the other mega-wealthy LEFTISTS who donate to The Party?

The left intend on punishing the deplorables. The just barely millionaires and below.; 1/7/19, 10:26 AM
n.n said...: Redistributive change forces gross economic misalignments. Progressive tax schemes create inequality. Minority regimes that also indulge in diversity get fat and stoke adversity. The issue is cost-of-living and equal (not "=") treatment.; 1/7/19, 10:27 AM
Nonapod said...: It's interesting to imagine the thought process behind this sort of policy ideas. I mean, if a 70% to 80% tax rate for super wealthy is good, why not a 90% or... heck, 100%? To hell with Laffer and his curve!; 1/7/19, 10:27 AM
Greg P said...: "When top rates were high, 70-80 percent, executive salaries were lower, much lower. Why? "

Well, because executives got paid in better benefits, that weren't taxed at 90%.

Got to love watching the left wing ignoramuses come out and play; 1/7/19, 10:27 AM
Unknown said...: > simply be shoveling most of that extra money to the government. They thought they had better uses for it, such as capital investment and better pay for workers.

nice guess...

When you tax something it disappears... strange... where did it go??

hint: companies and wealthy have fleets of tax accountants whose entire job is to make money disappear

Example
600 GE tax professionals moving to PwC
600 "global tax" people, and that isn't all of them

WHy do Google and Apple run billions through "The double irish with a dutch sandwich"?

https://www.investopedia.com/terms/d/double-irish-with-a-dutch-sandwich.asp

High tax rates are the best news for accountants, they should be down at the BMW dealer today....; 1/7/19, 10:28 AM
Nicholas said...: We tried this experiment in the United Kingdom, with marginal rates (especially on "unearned" investment income) of over 80%, during the 1970s. Mrs Thatcher's ascent to becoming Prime Minister saw top rates of tax slashed. The result? The amount of tax obtained from higher earners increased massively. Although marginal rates have crept up a bit since then, with the leftish tenor of governments since Tony Blair (and that includes the Conservative in Name Only, Mrs May), it remains the case that the top 1% of taxpayers pays 30% of the income tax raised.

If Krugmann thinks this makes economic sense, that's a further reality check that it makes no sense at all. A further reality check would be to look at State income taxes in California and then look at how many Hollywood virtue signallers are paying the full amount of such taxes, or whether exemptions, allowances and creative tax planning allows them to be avoided easily by those with more accountants than Mexican gardeners.; 1/7/19, 10:28 AM
gspencer said...: "But it means that as you climb up this ladder, you should be contributing more,” said BU's premier graduate

Where did the "should be" come from? There's no natural law demanding that. Marx came up with that mumbo-jumbo in his 1848 Communist manifesto. "Should be's" are declarations of morality, not of choice.

So I'm gonna throw back in the faces of the lefties what they dish up to us, DON'T IMPOSE YOUR MORALITY ON ME.; 1/7/19, 10:28 AM
Unknown said...: nobody who makes millions takes the income as W2 and pays 40% or 80% on it...; 1/7/19, 10:29 AM
Dear corrupt left, go F yourselves said...: Tax rape your enemies. That is the sociopath left's big plan. Krugman is king sociopath of economics.; 1/7/19, 10:29 AM
Freder Frederson said...: Yellow vests are active and Cali is starting the same thing.

Which is a completely nonsensical statement in this context. The yellow vests are protesting taxes and policies that make it difficult to live on a working class salary (e.g., VAT, fuel taxes, low wages). Why should they care (in fact they should advocate) if the richest people in the country pay 70 or 80% as a top marginal rate.

I assume the high rates would only kick in at very high incomes. So it is not as if you are paying 70% tax on your entire income, just the amount above some high amount, say a few million.

For all your supposed economic genius on the right, a lot of you (even Dust Bunny Queen, who claims she was a financial advisor) don't know how a graduated income tax works.; 1/7/19, 10:29 AM
chickelit said...: Here is a 1040 schedule for 1953-54. The top tax rate for income above $300,000 was around 91%. That's not say that someone earning that much in 1953 was taxed at that rate on all their income--just on what they made above that amount. That's called a marginal rate. Else, why would anyone make close to the marginal rate?

Note also that the poor paid a fair share of tax. There was no such thing as an entire class of people without skin in the game demanding more services without paying in. I wonder if AOC advocates a return to taxation (around 10%) of the lower income people?; 1/7/19, 10:29 AM
Alexander said...: Why does Paul Krugman state the obvious falsehood that only the United States has had such a high personal income tax rate?; 1/7/19, 10:30 AM
Temujin said...: He remains a crazy person out on the streets. I cannot believe we're even back to this discussion. There's hundreds of years of history to show what taxation does. But the basics is that income tax is a tax on your time of life- your labor. They are telling you that they own your time of life, your labor, and the fruits of your labor. They and only they will decide what you are allowed to keep. And they can change it at any time because, well, they know better.

And if your argument is that they're only doing this to the very rich, so I should applaud and thank my lucky stars they're not doing it to me...well, you know my next comment. You know how this ends. When you give them the power to own your time of life, you are done. You are now their slave. And if you think they'll stop with 70% on 'the rich' you'll be very surprised when you find out they've decided that you're the rich.

Or maybe you like the concept of being a slave? I think Democrats must. They always seem so afraid of liberty.; 1/7/19, 10:30 AM
tds said...: Belief that rich people are evil is one thing, but belief that they are actually retarded (=and pay 70%-80% marginal tax rates) is on a completely higher plane of delusion.; 1/7/19, 10:30 AM
Lucien said...: I remember the days of 70% marginal rates: dentists were buying oil tanker cars for the write-offs.; 1/7/19, 10:31 AM
Freder Frederson said...: Do you actually buy into the notion that the demcoratics will follow thru with a major 70%-90% tax on billionaires like Warren Buffet

You do know that Buffet is an advocate for a higher tax rate for the rich.; 1/7/19, 10:32 AM
Infinite Monkeys said...: While I was reading the first sentence, I was thinking that winning a Nobel for economics isn't any proof of being right about economics, look at Paul Krugman, and then I continue reading to see he's the one that thinks it is proof! Of course he does. Bless his heart.; 1/7/19, 10:32 AM
Balfegor said...: Re: seeing red:

France has something close to that now. How’s that working out for them?

I wasn't sure what France's top marginal tax rate was, but I thought it was less than 50%. I looked it up, and it seems to be 45%. So that's heavy, but not nearly as heavy as the a 70-80% rate would be.

In the US, the top federal rate is 37%, but then state taxes can add on another 13%+ (e.g. in California). In the past, because of the state and local tax (SALT) deduction, the math worked out so it was a little bit lower than 50%, but I think you just add them one on top of the other now, thanks to the GOP tax reform. So the wealthy in places like California have a marginal income tax rate of over 50%.

I don't know what kind of exemptions and deductions you get in France vs. the US, though, so I don't really know how these compare in practice.; 1/7/19, 10:33 AM
chickelit said...: The yellow vests are protesting taxes and policies that make it difficult to live on a working class salary (e.g., VAT, fuel taxes, low wages). Why should they care (in fact they should advocate) if the richest people in the country pay 70 or 80% as a top marginal rate.

I bought an orange vest from Amazon (arriving this week) which I intend to wear on my bike commute in solidarity with Trump and the gilets jaunes; 1/7/19, 10:33 AM
Freder Frederson said...: Why does Paul Krugman state the obvious falsehood that only the United States has had such a high personal income tax rate?

You stated that, not Krugman. Where in his article does it say "only" the U.S. had such a high marginal rates?; 1/7/19, 10:34 AM
Unknown said...: Who do executives work for?

Shareholders

If they want to pay less, they can easily do so.

Socialist want the govt to "invest"

When the govt invests, it will use legislative/regulatory power corruptly...

if it "invests" in electric cars, those will get tax breaks, subsidies, regulations that force you to buy electric cars (see Obamacare) and competitors to the govt chosen electric cars will get the shaft

When all that fails, the socialists will make the govt into a car manufacturer and declare a right to transportation.; 1/7/19, 10:35 AM
Unknown said...: > I remember the days of 70% marginal rates: dentists were buying oil tanker cars for the write-offs.

exactly - high taxes produce inefficient allocation of investment.; 1/7/19, 10:36 AM
Wince said...: Aside from the effective rate of taxation being rather stable over time, Krugman seems very dishonest here in promoting what can only be called a "tax-slave" economic model:

But here’s where competitive markets come in. In a perfectly competitive economy, with no monopoly power or other distortions — which is the kind of economy conservatives want us to believe we have — everyone gets paid his or her marginal product. That is, if you get paid $1000 an hour, it’s because each extra hour you work adds $1000 worth to the economy’s output.

In that case, however, why do we care how hard the rich work? If a rich man works an extra hour, adding $1000 to the economy, but gets paid $1000 for his efforts, the combined income of everyone else doesn’t change, does it? Ah, but it does — because he pays taxes on that extra $1000. So the social benefit from getting high-income individuals to work a bit harder is the tax revenue generated by that extra effort — and conversely the cost of their working less is the reduction in the taxes they pay.

Or to put it a bit more succinctly, when taxing the rich, all we should care about is how much revenue we raise. The optimal tax rate on people with very high incomes is the rate that raises the maximum possible revenue.

Three quick thoughts:

1.) So, the economic objective is maximum government revenue, not national income or employment outside of the government?

2.) To support this, Krugman strangely utilizes a labor participation model rather than a risk-reward investment model to explain behavior and consequences, which allows him to avoid addressing whether all segments of the economy suffer if the "rich" shelter their wealth in safer investments rather than create jobs.

3.) "Conservatives" believe we should strive to maintain a competitive economy, and the biggest enemy of that in most cases are the kind of distortions engendered by the government intervention Krugman and AOC advocate with the Green New Deal, for example.; 1/7/19, 10:37 AM
Freder Frederson said...: I don't know what kind of exemptions and deductions you get in France vs. the US, though, so I don't really know how these compare in practice.

Most European income tax systems have very few exemptions or deductions (no mortgage interest deduction, nothing for local taxes or VAT or charitable contributions). It is even hard to write off excessive travel expenses. For the vast majority of wage earners, the advertised marginal rate is exactly what you pay.; 1/7/19, 10:38 AM
Unknown said...: the typical way to avoid tax is to not take the income

set up a charity (Clinton Foundation) or a company with your family in it

spend the money as expenses

allocate the money to others who have lower tax rates (tax allocation)

leave the money in a C-corp where its taxed at a lower rate

have foreign companies hold the money

...; 1/7/19, 10:38 AM
Dear corrupt left, go F yourselves said...: This comment has been removed by the author.; 1/7/19, 10:39 AM
chickelit said...: Here are some comparative cost-of-living numbers I got from a pamphlet I picked up at a Borders Bookstore called 1953 Remember When...

New House $9,525.00
Average Income $4,011.00
New Car $1.651.00
Average Rent $83.00
Tuition to Harvard University $600 per year
Movie Ticket 70¢ each
Gasoline 20¢ per gallon
1st Class US Postage 3¢ each

Granulated sugar 85¢ for 10 pounds
Vitamin D Milk 94¢ per gallon
Ground Coffee 76¢ per pound
Bacon 55¢ per pound
Eggs 24¢ per dozen
Fresh Ground Hamburger 54¢ per pound
Fresh Baked Bread 16¢ per loaf

Everything is inflated by at least a factor of 10. Somethings are way out whack compared to today, especially housing. Also, there is no data for healthcare.; 1/7/19, 10:40 AM
Dear corrupt left, go F yourselves said...: Oppressive, job-killing, punitive, sociopath tax rates make mini-fascist dreams come true.; 1/7/19, 10:40 AM
Dear corrupt left, go F yourselves said...: If you can crush everyone and make them slaves to the state = Paul Krugman sociopath winning!; 1/7/19, 10:41 AM
Earnest Prole said...: Krugman and Ocasio-Cortez have not yet realized that the very rich they desire to soak are increasingly Democrats and not Republicans -- overwhelmingly so on the coasts.; 1/7/19, 10:41 AM
Freder Frederson said...: I remember the days of 70% marginal rates: dentists were buying oil tanker cars for the write-offs.

exactly - high taxes produce inefficient allocation of investment.

Only if the tax code allow you to right off such ridiculous "investments" (e.g., Betsy Devos' fleet of yachts).; 1/7/19, 10:41 AM
walter said...: “$21 TRILLION of Pentagon financial transactions ‘could not be traced, documented, or explained.’ $21T in Pentagon accounting errors. Medicare for All costs ~$32T. That means 66% of Medicare for All could have been funded already by the Pentagon.”

— Rep.-elect Alexandria Ocasio-Cortez (D-N.Y.), in a tweet, Dec. 2, 2018
--
Like..don't take those numbers literally. View them morally.

Freder informed us:
"The yellow vests are protesting taxes and policies that make it difficult to live on a working class salary.."

Yes, including the CAGW shit that AOC is dancing around with.
When even Anderson Cooper has to allude to her lack of numerical concern, I hope she screams her thoughts from the rooftops.; 1/7/19, 10:44 AM
Balfegor said...: Re: Dickin:

Do you actually buy into the notion that the demcoratics will follow thru with a major 70%-90% tax on billionaires like Warren Buffet, Ted Turner, The Twitter guy, The Apple people, the Facebook people, Tom Steyer, The Hollywood billionaires, and all the other mega-wealthy LEFTISTS who donate to The Party?

The problem for the Democrats is that while the super-rich are critical to their donor organization, and would be happy to see the burden of higher marginal tax rates fall on white collar professionals making $150K to $500K/year, those same professionals making $150K to $500K are a critical piece of the Democrats' electoral strategy. Without them, Democrats start losing key wealthy suburbs and exurbs that have been steadily trending in their favour for the past 20+ years.

Many of those professionals, live right up to their means for some reason (probably to flee crime and get into a decent school district for their children). So a couple thousand dollars in extra tax every year actually makes a big difference, and they will scream bloody murder if the tax burden falls on them. You should have heard people scream when they learned the SALT deduction would be phased out. They may earn 10 times the median household income in the US, but -- delusional though it may be -- they don't see themselves as "rich" at all.; 1/7/19, 10:44 AM
Unknown said...: You may want to read this for an alternative interpretation:

https://johnhcochrane.blogspot.com/2019/01/krugman-on-optimal-taxes.html; 1/7/19, 10:46 AM
Henry said...: The baseline for all of Krugman's policy ideas is a great depression and the destruction of Western Europe.; 1/7/19, 10:49 AM
William said...: I've read some biographies of Americans and how they lived at the mid point of the last century. The tax rate really did affect behavior. There were songs not written and movie roles not taken because it wasn't worth the effort. I think in the business community, the challenge was to find some way to put your money in the capital gains as opposed to the income column. There was quite a lot of finagling going in in those days. Much productive labor was spent with in finagling rather than creating ...... They always talk about corporate executives making more money nowadays, but what about sitcom actors? They've gotten fabulously wealthy. The "Friends" actors make twenty million a year in residuals. Seinfeld has the world's largest collection of Porsche cars. Poor Jack Benny, despite years of thrift and hard work, never accumulated a fraction of the wealth of those guys. Life is so unfair.; 1/7/19, 10:49 AM
Fernandinande said...: We tried this experiment in the United Kingdom,...
The result?

Taxman!; 1/7/19, 10:51 AM
Balfegor said...: Re: Freder:

Most European income tax systems have very few exemptions or deductions (no mortgage interest deduction, nothing for local taxes or VAT or charitable contributions). It is even hard to write off excessive travel expenses. For the vast majority of wage earners, the advertised marginal rate is exactly what you pay.

Thanks. I had completely forgotten about the VAT, but that's a huge revenue stream to the government there that we don't have in the US. So in practical terms, France probably has significantly heavier taxation than the US/California, even though their GDP per capita is only $38K (roughly between Alabama and Arizona).; 1/7/19, 10:53 AM
AllenS said...: If Buffet really wanted to pay more taxes, he could easily stop using some of the deductions that he uses to keep his tax burden low. However, he doesn't, does he? Gee, I wonder why.; 1/7/19, 10:57 AM
LA_Bob said...: The WaPo comment reminds me of an economic theory a certain John Early supports. He believes that very high marginal rates on very high brackets is the elixir to sound economic growth. I first found him on Seeking Alpha.com. See his Kindle book here.

The secret to the elixir is, almost no one pays those rates!

It's really a tax avoidance scheme. It is designed to encourage entrepeneurs and the very, very rich to keep investing in their businesses rather than take personal money out to be taxed. Early provides data that shows this tax policy, which was in effect from the Roosevelt years to about the mid '60's, has the strongest correlation with broadly distributed economic growth of any metric.

I found Mr Early's theory thought-provoking. I don't pretend to know if it is correct. But he lifts the debate above the puerile polemics of "allowing job-creators to keep what they've earned" vs "making the rich pay their fare share".

Note that John Early is not to be confused with John F Early who wrote this article for the Cato Institute and has a different perspective on income and wealth inequality.

Bob from Alhambra; 1/7/19, 11:01 AM
Laslo Spatula said...: Fine. Call the fucking bluff.

Income at-and-above $500K a year: 70% Federal Taxes, Flat, absolutely no write-offs or deductions.

Minimum Federal Congressional pay: $500K, and not a penny less.

I suspect a lot of people caught in the net will be Progressives explaining that THEY are not The Rich Ones.

There will be some dolphins caught with the tuna, but: Social Justice.

I am Laslo.; 1/7/19, 11:02 AM
Bay Area Guy said...: Ignorant leftwing people with small assets and small earning potential somehow think that taxing folks with large assets and large earning potential somehow will somehow benefit the former.

They are mistaken.; 1/7/19, 11:03 AM
Fernandinande said...: The optimal tax rate on people with very high incomes is the rate that raises the maximum possible revenue.

That's the optimum for the government. What about everyone else?

How about a tax rate is the rate which leaves people with as much of their own money as possible while allowing a functional government?; 1/7/19, 11:04 AM
Third Coast said...: Krugman is so provincial, he apparently doesn't know the French tried this just four years ago. Even Macron described it as "Cuba without the sun".; 1/7/19, 11:07 AM
Alexander said...: Freder:

He states it right here: "it’s a policy nobody has ever implemented, aside from … the United States, for 35 years after World War II"

The ellipsis is in the original. You might say that this is a colloquial manner of speaker, not meant to actually assert that the policy has been implemented only by the US -- after all, it has a jauntiness to it, etc. But in that case it's misleading, because it's not what we expect from an economist, from whom we ought to get the dismal truth. And if he's inviting us to associate the correlation here in some type of relationship. But what type of relationship did those have? Perhaps those suppressed cases would suggest a more accurate picture of the implications of such a policy. I wonder whatever it could be. If only there were an economist rather than ideologue writing here.; 1/7/19, 11:08 AM
gilbar said...: AllenS said...
If Buffet really wanted to pay more taxes, he could easily ... However, he doesn't,I wonder why.

They ASKED him, and he said: "i think *I* can better decide where *MY* money goes"
you see, unlike you and me; he's SUPER SMART! and so The Rules Don't Apply to him; 1/7/19, 11:10 AM
Dear corrupt left, go F yourselves said...: Castro-Cortez and her new found fuzzy sociopath faux economist are simply Bernie Bros.

Millionaires and Billionaires.; 1/7/19, 11:13 AM
Nonapod said...: The problem for the Democrats is that while the super-rich are critical to their donor organization

Yeah, you really have two classes here: the truly "rich" by any measure, and the upper-upper middleclass; those with net incomes somewhere between $200k and $1m.

When talking about the ultra wealthy, high taxes are something that can be evaded or mitigated in various ways, so the actual Federal tax rate is of less consequence to them than people who are merely well off (I'm not saying it's of no consequence, it's just that they have far more options). But ultimately a higher tax rate wouldn't effect their lifestyle in a meaningful way. They don't directly have "skin in the game" so to speak. The people immediately around them, their employees and others who depend on them for their livelihoods, are obviously less insolated. They might not be as willing to get into new investments. But they themselves are fine. Which is why when billionairs like Buffet get all pious about tax rates I have to roll my eyes a bit.; 1/7/19, 11:14 AM
Seeing Red said...: Until they define “the wealthy” by income, it’s BS.

Wealthy under Obamacare came in around $120k.

But it’s Congress, so the amount will be above their income.

Obamacare and other stupid top-down policies gave us the new normal of 2%.

With This madness, we will be lucky to get 1% and we will have open borders.

Math is hard.

Look to France. They’ve done this stupidity for decades.; 1/7/19, 11:16 AM
Freder Frederson said...: Income at-and-above $500K a year: 70% Federal Taxes, Flat, absolutely no write-offs or deductions.

Minimum Federal Congressional pay: $500K, and not a penny less.

Talk about a straw man. Nobody I have seen is advocating for a flat rate (i.e., the same rate from the very first penny earned) to kick in at a certain income. We are talking about the top marginal rate.

Again, google how a graduated income tax works before you make ignorant statements.

The problem for the Democrats is that while the super-rich are critical to their donor organization

You and others make this statement (which is true) or contend that there are many more super rich Democrats than Republicans (which is absurd), but the implication is always that donations by the super-rich are much more corrupting on the Democrats than Republicans. That is also an absurd statement.

The corrupting influence of the super rich on our political system on both parties is why this proposal is DOA.; 1/7/19, 11:16 AM
chuck said...: Krugman thinks everything, from salaries to morals, is the government's business. It is not about economics, it is about power and who should have it.; 1/7/19, 11:17 AM
Sam L. said...: Paullie "The Beard" Krugman. I trust him implicitly...NOT.; 1/7/19, 11:18 AM
Michael said...: The point, again, is that people didn't actually pay those high rates. They put their creativity, effort, and money into dodgy tax shelters of little or no economic value. Investment decisions were greatly distorted by the need to generate accounting losses and make ordinary income look like capital gains. This got mostly fixed in the Showdown at Gucci Gulch in 1986. We should have just dissolved the Congressional tax committees at that point.; 1/7/19, 11:18 AM
iowan2 said...: Someone up thread mentioned Buffett. He is famous for saying his secretary pays more tax on her income, than he does.

Income. A higher percentage of tax on income. FICA taxes max out. That's just one political slight of hand. The rich have many income streams. Most of them are not defined as income, for income tax purposes. This is all leftist bullshit.

Income to the US treasury is up, with the latest tax cuts. Lower tax rates. More gross tax revenue.

Don't forget, the politicians writing the AOC tax code (she's fool if she thinks her input will be sought) are rich, or working towards it, and write in the appropriate tax language, so their income never sees 70% marginal tax rate.

If the govt wants money, the only place to get it is from people making $50k to >$1 million. Because that's where almost all of the income is made.; 1/7/19, 11:20 AM
rehajm said...: With those high rates you could also deduct everything. The car you rode to work in, lunch and the dues the golf club where you ate it, the mortgage interest to the house you drove home to where your kids lived (also a deduction). Your effective rate was much lower. That wasn't a better policy as it created distortions what discouraged capital investment- the opposite of what Krugman claims.

Krugman is confusing the reasons for the strong post WWII economy- household formation and domestic rebuilding rather than crappy tax policy. Trading a lower marginal rate for a reduction in deductions and exemptions is the stimulative policy.; 1/7/19, 11:22 AM
Hagar said...: Incidentally, the Norwegian Labor Party's share of the vote peaked in 1948 at 42.8%, iirc, and a good portion of that were people who voted Labor because they were "laborers," but had no idea what the Party's program actually was. So the Labor Party was never able to really institute socialism into the country, since even their own voters would not have stood for it. However, in the parliamentary system, they did hold the government, since it proved impossible to get the "bourgeois" (non-socialist ideologies) parties to join together to form a coalition government.
There were (and the system is now even more splintered) parties like the Christian People's Party, which evangelical Christians thought they had to vote for, the Farmers' Party, which farmers thought they were obliged to support, and so on, but the main obstacle was Venstre, roughly corresponding to liberal Democrats in the US, who absolutely refused to cooperate with any other party whatever under any circumstances.
However, Venstre has now shrunk almost out of existence, and some years ago the Labor Party proudly announced it no longer was a "socialist" party, but had evolved to become "social democrats."; 1/7/19, 11:26 AM
Bob Boyd said...: "economic inequality, the bane of our society, today."

Economic mobility is more important than economic equality.; 1/7/19, 11:28 AM
rehajm said...: Krugman and leftie politicians also always assume economies are static- that a change in tax policy will create zero change in behavior. It's true only in a simulated CBO world. A tax on a wealthy household may cause modest changes in behavior for the rich household that devastates the lower income household. Fire the daycare center and watch what happens. Who government targets to pay a tax and who bears the economic burden of that tax are often very different people.; 1/7/19, 11:29 AM
Gk1 said...: This is all liberal lip flapping or "fapping" like the Occupy nonsense. They don't believe a word of it and are trying to find an issue, any issue to run on. Who doesn't want to tax those "fat cats" and make them pay their "fair share"?!? (This is as old as the hills) What will be interesting for me is to see how the Trump wing of the republican party reacts to all of this signal noise.; 1/7/19, 11:30 AM
rehajm said...: economic inequality, the bane of our society, today.

Why does the delta matter more than say the absolute level of poverty? It shouldn't and doesn't.; 1/7/19, 11:30 AM
MikeR said...: "for 35 years after World War II — including the most successful period of economic growth in our history" Indeed. The rest of the world was rebuilding from having been burnt to the ground in WWII, and the US was able to profit. So much, in fact, that even insane tax rates couldn't really make a dent in it.
That proves that very high tax rates will work now?
Paul Krugman is a very bright guy but there isn't generally much point to reading him. You know what he is going to say before he says it.; 1/7/19, 11:31 AM
walter said...: chickenlittle said...
Here is a 1040 schedule for 1953-54. The top tax rate for income above $300,000 was around 91%. That's not say that someone earning that much in 1953 was taxed at that rate on all their income--just on what they made above that amount. That's called a marginal rate.
--
AOC aimed to school Scalise on that via Twitster recently.

The tax rates she espouses are one thing, the economic wet blanket that would occur should her list of ideas become reality is another thing.; 1/7/19, 11:32 AM
daskol said...: If you're talking tax rates, marginal or flat, high or low, the socialists are winning. We have revenue, and we have spending. In firms from households to large corporations, the two sides of the ledger need to balance out. Revenue intake impacts spending, and vice versa. Despite the presentation of the country's books, that is not how things work in government. Revenue and spending must be seen as completely distinct: you can't raise revenue to get out of your spending problems. The idea that we need to raise revenue to fund some new program is belied by the way things actually work in government. It's an attractive fiction meant to impart a sense of orderliness and discipline that does not exist when it comes to federal or even state governments (bc some states are counting on federal bailouts).

In fact, we may not have a revenue problem at all, when you look at tax receipts: they're going up and up, and will rise despite the Trump tax cut. Spending increases faster, and there's enough data to suggest this is structural and unlikely to change without radical change to incentive structures within government. So, like, it's not going to change until we run out of money. Discussing tax rates is a dodge, a way to avoid discussing our spending problem. Spending is automatic, increases automatically, and will likely do so until we run out of money.; 1/7/19, 11:34 AM
walter said...: But hey..as my friend's Spanish former econ major wife says "Taxation is the source of all wealth".
(She moved into environmental studies); 1/7/19, 11:35 AM
Greg P said...: So, the Democrats who screamed bloody murder about their richer voters losing the SALT deductions, are going to unsteady double all their rich voters' taxes?

Yeah, right; 1/7/19, 11:39 AM
mockturtle said...: This is yet another way, an indirect way, in which low top rates encourage economic inequality, the bane of our society, today.

The bane of our current society is Trump Derangement Syndrome.; 1/7/19, 11:40 AM
Yancey Ward said...: Bay Area Guy above makes exactly the right riposte- nothing is stopping California or New York from raising the state income tax rate to 70-80%.; 1/7/19, 11:43 AM
LYNNDH said...: Actually as Buffet has pointed out, his and other supper rich aren't paid an "income". Thus their taxes are low if you count all the money they get. If you taxed them at 70% of all their money, they would be the first to howl at the moon.; 1/7/19, 11:43 AM
HoodlumDoodlum said...: Nominal rates are not effective rates. That's pretty much all you need to understand to get that Krugma's shoveling bullshit here.; 1/7/19, 11:44 AM
daskol said...: Gk1 said...
What will be interesting for me is to see how the Trump wing of the republican party reacts to all of this signal noise.

Agree on this point. Bannon supported an increase in the marginal tax rate for the wealthy. It's a potentially brilliant political gambit, especially if it cuts the legs out of the Dom opposition. Tucker Carlson sounds like he might support it too, or at least he's coming around to the populist perspective. This is an area where AOC's spopulism can, and politically speaking probably should be coopted by the Trumpian populists in the GOP.; 1/7/19, 11:44 AM
Laslo Spatula said...: "Talk about a straw man. Nobody I have seen is advocating for a flat rate (i.e., the same rate from the very first penny earned) to kick in at a certain income. We are talking about the top marginal rate.... Again, google how a graduated income tax works before you make ignorant statements."

My understanding is fine, thank you.

That's why I said "Call the fucking bluff."

It's always higher taxes proposed on an ill-defined group of people -- i.e., the ones the right-thinking people want to punish for being rich and not right-thinking -- then it is time for moving goalposts and musical chairs to let the right people off the hook: the tax code is just gerrymandering for the financially-well-off and politically-well-connected.

I want Pelosi's husband paying a flat 70%.

I want Pelosi herself paying a flat 70%.

I want Anderson Cooper paying a flat 70%.

I want Robert DeNiro and Alec Baldwin and Sean Penn and Meryl Streep paying a flat 70%.

The same fucking amount, whether you live in NYC, SF, DC, Seattle or Nowhere, Iowa.

Anything else, and you are simply saying you want to reserve the right to choose winners and losers.

Both goose and gander into the pâté.

I am Laslo.; 1/7/19, 11:46 AM
Skeptical Voter said...: Lucien "oil tanker cars for the writeoff"? You betcha. Dentists and doctors and small business owners (my brother in law) were suckers for a lot of things. One year there were a lot of tax shelters involving macadamia nut orchards. Your average dentist in Keokuk Iowa really knows macadamia nuts. The next year the favored tax writeoff was investment in cattle feed lots. The doctors out in San Diego who were buying this stuff by the bucket load didn't understand the risk of shipping fever --but a bunch of feeder cattle on the Gulf Coast, ship them to the Texas Panhandle to fatten them up---and watch them die like flies. I handled some of the feed lot lawsuits in the early mid 70s. My brother in law went in for wind farms in the early 80s.

The tax writeoffs were nice. But what the docs, dentists and small business owner didn't anticipate was that every cent of their investment would eventually disappear, and not in a good way. One ought not to invest in things one does not understand.; 1/7/19, 11:48 AM
stlcdr said...: Not really.

As already noted, people didn’t pay those rates. Instead, they were compensated with things that weren’t taxed. Someone had to make those things, thus a driver for the economy.; 1/7/19, 11:50 AM
Mary H said...: I think, as an experiment, all NYTimes employees should be taxed at the 70 percent rate or higher. Then they could write from real-world experience.; 1/7/19, 11:52 AM
daskol said...: This comment has been removed by the author.; 1/7/19, 11:53 AM
daskol said...: Trump's elimination of the SALT deduction--so now New Yorkers and others in high tax states can't deduct their state tax bill from their Federal liability--is the closest we've come to something like Laslo's "across the board" tax rate increase. In NY, state tax treats capital gains the same as income, so all those Wall Streeters who took advantage of the carried interest rule and lower Federal rates on cap gains took it right on the kisser. Good politics.; 1/7/19, 11:56 AM
Anonymous said...: If you really want to force corporations to pay employees more why not pass a law that says they have to pay X percentage of their top line revenues toward employee compensation. Why try to backdoor it like Krugman suggests. If major corporations had to pay some certain amount toward employee paychecks rather than paying it out to executives and shareholders wouldn't that be a more direct way to increase pay? I don't recommend it because I believe the less the government interferes in business the better. But it's an idea I was kicking around for a long time. I've never heard anyone else seriously consider it.; 1/7/19, 11:58 AM
My name goes here. said...: Freder said in response to the yellow vests showing up...

"Which is a completely nonsensical statement in this context. The yellow vests are protesting taxes and policies that make it difficult to live on a working class salary (e.g., VAT, fuel taxes, low wages). Why should they care (in fact they should advocate) if the richest people in the country pay 70 or 80% as a top marginal rate.

I assume the high rates would only kick in at very high incomes. So it is not as if you are paying 70% tax on your entire income, just the amount above some high amount, say a few million."

In California where you have to have a very high income to afford a house, you are probably making the "high amount" necessary to be hit with some pretty big additional taxes.

In short many good progressive democrats in California are the richest people in the country.; 1/7/19, 11:59 AM
stevew said...: "And it’s a policy nobody has ever implemented, aside from … the United States, for 35 years after World War II — including the most successful period of economic growth in our history...."

Lots of correlation / causation conflation today.; 1/7/19, 12:01 PM
Seeing Red said...: CATTLE FUTURES! Lolololol

Freder can’t understand what France and Cali have in common?

And why?

Lololol; 1/7/19, 12:04 PM
Leland said...: Accepting Krugman's premise, the result would be corporate HQ moving overseas, so that their leaders can reside in financially friendly environments. New York and California can't move so easily.; 1/7/19, 12:05 PM
Robert Cook said...: "Investment raises the productivity of the poor, and that raises the wages of the poor."

And yet, talk of increasing the minimum wage to $15.00 per hour is dismissed as crazy talk.

Face it, it's a shell game, and everyone not in the 1% are the suckers being taken.; 1/7/19, 12:05 PM
BJM said...: HoodlumDoodlum said...
Nominal rates are not effective rates. That's pretty much all you need to understand to get that Krugman's shoveling bullshit here.

Krugman has a Nobel in shoveling Bullshit.; 1/7/19, 12:07 PM
narciso said...: Krugman had opposed that level of taxation in the past,; 1/7/19, 12:07 PM
JPS said...: stevew:

"Lots of correlation / causation conflation today."

See also,

"economic inequality, the bane of our society"

I think economic inequality is more a symptom than a cause of serious societal problems.; 1/7/19, 12:10 PM
Balfegor said...: Re: daskol:

Agree on this point. Bannon supported an increase in the marginal tax rate for the wealthy. It's a potentially brilliant political gambit, especially if it cuts the legs out of the Dom opposition.

I'm actually fine increasing taxes on the wealthy, provided it is phased in concurrent with (1) actual cuts in spending (not cuts to the rate of increase in spending -- real YOY decreases) and (2) an increase in taxes on the middle classes to avoid making our tax revenue base even more volatile than it already is.

During the Obama years, the economy was doing so poorly this wasn't really feasible, but under Trump, I think the economy may actually be good enough to absorb these kinds of contrationary policies. Last year, despite the downturn in December, we apparently had 3% growth for the year (I don't think there's formal numbers out yet, but I'm seeing references to that here and there), and 3.2% wage growth, which is surprising and positive.; 1/7/19, 12:12 PM
Dear corrupt left, go F yourselves said...: Soaking the rich never includes rich leftists.

Polis, Stryker, Steyer, Rutt Bridges? Hollwyood? Buffet, The Clintons - nah.; 1/7/19, 12:15 PM
rehajm said...: and 3.2% wage growth, which is surprising and positive.

Given the positive change in policies the wage growth was only surprising to some.; 1/7/19, 12:17 PM
Birkel said...: I look forward to the restrictions on international capital flows these policies would require, placed on us by the same people who decry Trump's trade war.

Further, unless every other country raises rates this high (and they are all poorer countries with poorer people who can, accordingly, afford less) capital flight would be required to reach equilibrium.

I read those things in Krugman's textbook on International Economics.; 1/7/19, 12:18 PM
tcrosse said...: And yet, talk of increasing the minimum wage to $15.00 per hour is dismissed as crazy talk.

An increase in the minimum wage is a regressive tax, like an increase in sales tax. It's a blunt instrument which does not hit those most able to pay.; 1/7/19, 12:20 PM
Howard said...: Just wait till the bots take most jobs. The tax rate will need to be 95% to keep you people in diapers; 1/7/19, 12:23 PM
David Begley said...: AOC creates more Trump voters every day. Keep talking!

The so-called AC interview of AOC was a hoot. Her family moved from the Bronx to Westchester County because of the schools. Don’t the Dems run the failed Bronx schools?; 1/7/19, 12:24 PM
SeanF said...: Robert Cook: "Investment raises the productivity of the poor, and that raises the wages of the poor."

And yet, talk of increasing the minimum wage to $15.00 per hour is dismissed as crazy talk.

Well, yes. Raising the minimum wage bypasses (and actually subverts) the "raises the productivity" part, which is kind of an important part.; 1/7/19, 12:36 PM
Robert Cook said...: "Raising the minimum wage bypasses (and actually subverts) the 'raises the productivity' part, which is kind of an important part."

And...how does income to the poor rise if there is no rise in wages? What is meant by "raises the productivity?" It's all doubletalk and hocus pocus.; 1/7/19, 12:45 PM
hstad said...: "...And it’s a policy nobody has ever implemented, aside from … the United States, for 35 years after World War II — including the most successful period of economic growth in our history.....!" Like all frauds and liars in the news industry, such a statement leaves out several important facts about a top 70% historical tax rate. Firstly, the typical tax deductions where massive during that time frame. Moreover, little things like "Income Averaging" for individuals where included in the tax code. Finally, the writer confuses "top tax rate" with the "effective tax rate". I can go on endlessly, but such comparisons of it was done successfully and credit our economic growth was hoisted on the reader as a fraud. Our "economic growth" was due to one thing, and one thing only. After WW2 and throughout the '50s and less so the '60s we where the only country which survived unscathed the destruction of economic power of WW2. Just another lying socialist and ignorant moron from the media.
Don't believe me - check this out: https://taxfoundation.org/taxes-rich-1950-not-high/; 1/7/19, 12:45 PM
tcrosse said...: It's very unlikely this will be enacted anytime soon, especially after OAC's fifteen minutes of fame are over.; 1/7/19, 12:51 PM
YoungHegelian said...: We should remember when we talk about the American "mega-rich" that we are talking about a class of people, who, while they are certainly not checking under the sofa cushions for spare change are not mega-rich because of any sort of "income". They are almost all mega-rich because they own lots & lots of stock in the companies they created. It is the market value of their stock holdings that make them mega-rich, not the amount of cash in their bank account. Their stock portfolios are generally tax-sheltered until sold in which case gains-taxes must be paid.

This situation sets up a very strange dynamic. As officers of public corporations, these mega-rich must report to the SEC any "major" sale of their stock. These sell-offs by officers are seen by the market as a sign of bad news to come, & so, a sell-off by an officer generally tanks the value of the rest of that officer's holdings.

In essence, a corporate officer's stock holdings are a golden ball & chain -- they count as wealth, but can't be converted to any other form of wealth except slowly over a period of years.; 1/7/19, 12:53 PM
rehajm said...: What is meant by "raises the productivity?" It's all doubletalk and hocus pocus.

Go read a book, Cook; 1/7/19, 12:54 PM
MOFD said...: I'm so old, I can remember when Republicans were mocked for wanting to turn the clock back to the 1950's.; 1/7/19, 12:54 PM
Big Mike said...: So, the Democrats who screamed bloody murder about their richer voters losing the SALT deductions, are going to unsteady double all their rich voters' taxes?

Yeah, right

@Greg P, +1; 1/7/19, 12:55 PM
Jim at said...: When you need an advocate for something completely economically idiotic, there's nobody quite like good ol' Krugman. I can never decide if he really believes half the claims he makes or not.

Ask those who invested in Enron if he believes the claims he makes.; 1/7/19, 12:55 PM
Seeing Red said...: A $15 minimum wage is crazy talk for most of the country.

What it does is subsidize the expensive parts of the country- the blue cities.

It’s a wealth transfer. Teenagers don’t need a $15 dollar wage. Those entry level jobs aren’t meant to support a family of 4.

It gets more robots.; 1/7/19, 1:01 PM
Big Mike said...: I am in favor of a 70% flat tax on all elected politicians, and a 30% surtax on Democrat politicians.; 1/7/19, 1:02 PM
Tommy Duncan said...: Another Nobel laureate in economics on taxes:

“I am favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible.” ― Milton Friedman; 1/7/19, 1:03 PM
Anonymous said...: So, the Democrats who screamed bloody murder about their richer voters losing the SALT deductions, are going to unsteady double all their rich voters' taxes?

Exactly... and those SALT deductions had the unique advantage of hitting both the actually-wealthy (via property taxes) and high income earners (via state/local income taxes).

Democrats' so-called willingness to pay more is all talk.; 1/7/19, 1:06 PM
Seeing Red said...: I C it’ll be time to invest in artwork for the office.

Remember those days?

I’m so old, I do!; 1/7/19, 1:07 PM
Freder Frederson said...: My understanding is fine, thank you.

That's why I said "Call the fucking bluff."

I guess I was wrong. There are actually cranks on the internet calling for a flat rate of 70% (levied on certain people) to kick in at high incomes.

Perhaps Laslo can find a sponsor in Congress. We can call it "Income and Wealth Tax on Motherfuckers Laslo Doesn't Like Act of 2019".

And apparently you don't understand the meaning of "call the fucking bluff" either. If you were going to call the bluff you would say "okay lets raise the top marginal rate to 70%", not make up an even more draconian proposal, that would be "raising the stakes".

But not surprising considering you consider Trump some kind of genius. Hell, he even came out today and said "how about you give me 5.7 billion, instead of the 5 billion I initially wanted, and as a concession we will make the wall out of steel instead of concrete". WTF; 1/7/19, 1:12 PM
rehajm said...: It gets more robots.

It definitely gets more robots...and more to my earlier point: the brunt of the economic burden falls not on the politician's intended target of the companies who pay it but disproportionately on the people working at that wage level.; 1/7/19, 1:19 PM
Hey Skipper said...: The problem for the Democrats is that while the super-rich are critical to their donor organization, and would be happy to see the burden of higher marginal tax rates fall on white collar professionals making $150K to $500K/year ...

Exactly. Do not underestimate progressives' looting instinct.

I'm a Captain for a major airline — pretty decent paying gig, around $330k/year. So I'm into the 35% bracket. Because there is almost no limit to progs desire to loot, I am sure that if Krugman and Occasional-Cortex had their way, I'd be in the 70% bracket, too.

Guess what. I'm not going to work for 30 cents on the dollar. And my compatriots won't either. So if you want air travel to grind to a halt, by all means, double the rate in the top bracket.

Of course, we will also greatly reduce our spending on 'vettes, boats, houses, etc. Which means less money will get spent on people producing things other people want, and more will go to the government, which will pay a great many people to do nothing, or nothing of value. Which really raise the most important issue, for those who think Venezuela is a cautionary tale: who uses money most efficiently, individuals, or the government?

Oh, and what about ghetto kids who, through talent and a great deal of hard work, make it to the bigs. And they make millions, mostly for a few years. And Krugman wants to give 70% of that to the government, and to people who didn't do a damn thing to earn it. How is that fair?; 1/7/19, 1:19 PM
TrespassersW said...: "...economic inequality, the bane of our society..."

See also: assertion, unsupported; 1/7/19, 1:23 PM
Big Mike said...: There's a lot of people more concerned about being precisely, factually, and semantically correct than about being morally right.

That’s Ocasio-Cortez on “60 Minutes.” So as long as she feels “morally right,” she doesn’t much care whether the proposed 70% tax “precisely, factually” raises additional review, or does the opposite. Note to Democrats and other math-challenged riff-raff scum: Rolle’s Theorem is true whether you wish it so or wish it isn’t.; 1/7/19, 1:25 PM
Big Mike said...: And income distribution always follows a Pareto probability distribution. No one knows why, but all government can do is change the winners, not eliminate the differences.; 1/7/19, 1:31 PM
Freder Frederson said...: because there is almost no limit to progs desire to loot, I am sure that if Krugman and Occasional-Cortex had their way, I'd be in the 70% bracket, too.

At what income do you envision AOC and Krugman instituting the tax? Because, again the implication is that you would be paying 70% on your entire income. That is simply not the way the income tax works or has ever worked at the Federal Level. Some states do have an income tax that approaches a true flat income tax, but those rates are generally much lower.; 1/7/19, 1:32 PM
tim maguire said...: Whenever I hear Paul Krugman's name, I think of Daniel Okrent, the Times' Public Editor who, when he left, took a parting shot at Krugman, faulting him for cherry picking his facts and deliberately mischaracterizing his opponents' arguments.

I haven't heard from Okrent in a while, but Krugman is the same old Krugman.; 1/7/19, 1:33 PM
RobinGoodfellow said...: That 70% rate carried through to 1981.

Remember the 1970s? Good times!

Not to mention the booming 1930s, when the top rate was 63%!; 1/7/19, 1:34 PM
Unknown said...: > There's a lot of people more concerned about being precisely, factually, and semantically correct than about being morally right.

MY morals say YOU need to pay more tax!

When she proposes a 70% tax on Congressmen

Then we know its a moral decision

You first, Sandy!; 1/7/19, 1:34 PM
I Callahan said...: For all your supposed economic genius on the right, a lot of you (even Dust Bunny Queen, who claims she was a financial advisor) don't know how a graduated income tax works.

Oh, we know what a graduated income tax system means. What it means is that you can tax multimillionaires at 90% until you’re blue in the face. The fact that there really aren’t that many of them means it isn’t going to make a dime’s worth a difference. When the economic geniuses on YOUR side figure that out, you’ll apply those rates to lower income amounts, thereby proving the point many have made in this thread: lefties should be the last ones calling others “geniuses” when something this obvious hasn’t occurred to them.; 1/7/19, 1:35 PM
Oso Negro said...: I think an asset tax would be better. Anyone in public service who was more than a million in assets can give the excess amount back; 1/7/19, 1:40 PM
Nonapod said...: The problem with AOC's feeble justifications are that just because something "feels" morally right, doesn't mean it actually is morally right.

If you concede the point that a policy that is economically destructive to regular people is morally wrong, than surely advocating for such a policy also morally wrong.

But wait, you may say, what if you're ignorant of the effects of such a policy? You're intentions are good, you're just ignorant, right? Well, choosing to remain ignorant when you're in a position of power and influence, when you're in a postion to easily educate yourself on history, strikes me as morally wrong too.; 1/7/19, 1:43 PM
I Callahan said...: At what income do you envision AOC and Krugman instituting the tax?

Well, how much are national healthcare and the Green New Deal going to cost? That much.; 1/7/19, 1:46 PM
Hey Skipper said...: [Freder:] At what income do you envision AOC and Krugman instituting the tax? Because, again the implication is that you would be paying 70% on your entire income.

No, that isn't my implication. I stated that clearly — at the moment, I'm into the 35% bracket.

My assumption, borne out by plenty of historical experience, is that the Krugman's of the world will ultimately decide a level of income far lower than what they claim now will be subject to extortionate tax levels.

Let's say $250k is beyond which heinous inequality starts. So once I get to that point, then I'm working for 30 cents on the dollar.

Not going to do it. I will pace myself, just as my compatriots will, to do $250k of work in a year, or pack it in sometime in August.

If Krugman and his ilk think a 70% bracket isn't a huge disincentive, they are so stupid that they shouldn't be let out of the house absent continuous adult supervision.; 1/7/19, 1:47 PM
YoungHegelian said...: You wanna see the shit start flying in the US? Impose a wealth as opposed to an income tax. Several countries have tried some form of it.

That's where the real money is. Luckily for us in the Land of the Free & the Home of the Brave, it seems to be unconstitutional.; 1/7/19, 1:48 PM
n.n said...: It would be a progressive tax on workers. An alternative approach is a tax on wealth, which would have a broad-spectrum reach. Or we could address market distortions that have hurt affordability and availability, and redistributed its effects.; 1/7/19, 1:56 PM
Unknown said...: > Not going to do it. I will pace myself, just as my compatriots will, to do $250k of work in a year, or pack it in sometime in August.

Exactly. Skipper really does take his income as salary rather than stock options or a corporate plane, so he has nowhere to hide from income tax.

So why work work more?

That is always the result in a commie revolution.

AOC is the Red Guard.; 1/7/19, 1:57 PM
Gk1 said...: This is all so boring. None of this is real. Why are we even paying attention to a know nothing like AOC anyway? Just because the media likes looking at her boobs? Because she doesn't have liver spots like 95% of the democrats running for president? I could get a more informed opinion on tax policy at the local high school. At least they admit they have no idea what they are talking about but by gosh, they're passionate!; 1/7/19, 1:58 PM
Unknown said...: I took former Enron advisor Krugman's investment proscription

and sold all my stocks when Trump was elected

Now I have nothing to tax!; 1/7/19, 2:00 PM
Laslo Spatula said...: "Perhaps Laslo can find a sponsor in Congress. We can call it "Income and Wealth Tax on Motherfuckers Laslo Doesn't Like Act of 2019".

And apparently you don't understand the meaning of "call the fucking bluff" either. If you were going to call the bluff you would say "okay lets raise the top marginal rate to 70%", not make up an even more draconian proposal, that would be "raising the stakes".

The bluff I am calling is the evergreen idea that there is a magic group of people out there that we can raise taxes on, while carving out safety zones for our own favored tribe(s). The details vary with each proposal, but the general intent is always the same: fuck 'the other guys'.

I proposed a flat tax on ALL people at a specific rate that was consistent and without exception for everyone at that amount. Insert Gary Oldman 'Everyonnnne' meme here if that helps.

You then call that the "Income and Wealth Tax on Motherfuckers Laslo Doesn't Like Act of 2019".

I get it: you don't want it to apply to everyone, just the Monopoly monocle dudes. Because if it applies equally to everyone then it loses any punitive power, which makes it harder to masturbate your throbbing cock of righteousness.

But 'consistent and without exception' is evidently "draconian". As I said: Anything else, and you are simply saying you want to reserve the right to choose winners and losers.

I am Laslo.; 1/7/19, 2:01 PM
John said...: > I remember the days of 70% marginal rates: dentists were buying oil tanker cars for the write-offs.

In 1965 70% kicked in at $200k for married filing jointly. That's $1.6 million adjusted for inflation. That's on successful dentist.; 1/7/19, 2:03 PM
walter said...: Unknown said...
I took former Enron advisor Krugman's investment proscription
and sold all my stocks when Trump was elected
Now I have nothing to tax!
--
Winning!; 1/7/19, 2:08 PM
John said...: In 1955 the top rate of 91% kicked in at $400k. That's $3.775 million today. Just something to keep in mind. We weren't taxing successful dentists at a marginal rate of 91%.; 1/7/19, 2:09 PM
Hey Skipper said...: John, you grossly underestimate progressive lootery.; 1/7/19, 2:13 PM
rehajm said...: My assumption, borne out by plenty of historical experience, is that the Krugman's of the world will ultimately decide a level of income far lower than what they claim now will be subject to extortionate tax levels.

The standard trap is to fail to index the income levels to inflation, snaring more households as incomes keep pace.; 1/7/19, 2:16 PM
Freder Frederson said...: Not going to do it. I will pace myself, just as my compatriots will, to do $250k of work in a year, or pack it in sometime in August.

Assuming that you could get your employer to agree to you working fewer hours or let you stop work for the year in August. Am I to understand that you will throw away $52000 in income (you are already paying $28000 on that excess income), just to spite Paul Krugman and AOC?; 1/7/19, 2:19 PM
Fernandinande said...: "No Taxidermiation Without Representation"; 1/7/19, 2:21 PM
YoungHegelian said...: I remember the days of 70% marginal rates: dentists were buying oil tanker cars for the write-offs.

And I remember when the Reagan administration ended the "empty commercial building" write-off. All of a sudden commercial buildings in the DC area that had been empty suddenly started to fill up with tenants.; 1/7/19, 2:24 PM
Sebastian said...: "obviously crazy, right?"

Right. As one Paul Krugman said in 2004 about going back to the 1980 top rates: "Oh, no! Those rates were insane!"

As reported by economist Economist Bill Anderson, via David Bernstein.; 1/7/19, 2:24 PM
Bilwick said...: One thing to keep in mind about Crazy Eyes Alex: she was just quoted as saying that although she may be factually incorrect about some times, she is nonetheless "morally correct." You can't argue with that logic, folks. You really can't.; 1/7/19, 2:27 PM
Bay Area Guy said...: Prof. Paul Krugman is a highly educated, erudite dumbfuck.; 1/7/19, 2:28 PM
Dear corrupt left, go F yourselves said...: Krugman is a super-hack. And, he probably wants to get into Castro-Cortez' dance pants.; 1/7/19, 2:29 PM
My name goes here. said...: John said
"In 1955 the top rate of 91% kicked in at $400k. That's $3.775 million today. Just something to keep in mind. We weren't taxing successful dentists at a marginal rate of 91%."

You are kind of making the point here. Dentists that were looking to put their money somewhere else (like oil tanks) were being taxed (at the marginal rate) far far less than the 91%, and they were still looking to shelter income everywhere they could. The more expensive you make the marginal rate the more you incentivize the dentist (or anyone with means) to put their money anywhere they can to keep it from being taxed.

Or put another way, a high marginal rate results in a malaportionment of capital.; 1/7/19, 2:32 PM
Howard said...: I have it on good authority that AOC will be given an extra 30-minutes of fame due to being an AA double dipper; 1/7/19, 2:36 PM
Balfegor said...: Re: Frederson:

Assuming that you could get your employer to agree to you working fewer hours or let you stop work for the year in August. Am I to understand that you will throw away $52000 in income (you are already paying $28000 on that excess income), just to spite Paul Krugman and AOC?

I don't see how this is so hard to understand. Suppose you have to work 100 extra hours to get $20,000 more in income. That's worth it to you at $200/hour. Maybe it's still worth it to you at $100/hour (50% taxation. But maybe at $50/hour (75% taxation), the marginal income just isn't worth the time you expend. Because there's always other things you could be doing with your time. You could be spending time with family. Or reading a book or something. And that might be worth more than $50/hour.

It's not "spite." It's common sense.; 1/7/19, 2:38 PM
Sebastian said...: Of course, AOC is a typical dishonest American leftie. The criterion of leftie honesty is this: will they raise the rates of the poor and middle class to European levels and propose a regressive VAT? For the sake of solidarity, you know?

As long as they don't, and simply want to make America's already absurdly progressive income tax system even more progressive, we know they are only "morally right" in pursuing power by any means.; 1/7/19, 2:40 PM
Balfegor said...: Re: Gk1:

This is all so boring. None of this is real. Why are we even paying attention to a know nothing like AOC anyway? Just because the media likes looking at her boobs? Because she doesn't have liver spots like 95% of the democrats running for president?

For better or worse, I think she speaks for a pretty sizeable contingent of millenial voters. And unlike a lot of other Democratic politicians who sometimes say similar things, e.g. Elizabeth Warren, she's not awful and grating. She comes across as "genuine," and sort of likeable, even if she seems ignorant.; 1/7/19, 2:41 PM
My name goes here. said...: "Assuming that you could get your employer to agree to you working fewer hours or let you stop work for the year in August. Am I to understand that you will throw away $52000 in income (you are already paying $28000 on that excess income), just to spite Paul Krugman and AOC?"

Where do you get the $52000?; 1/7/19, 2:45 PM
John said...: I don't see how this is so hard to understand.

Many people making $200k are w-2 salary employees and they often can't adjust their workload/slary down from $200k to $180k. It's often all or nothing.; 1/7/19, 2:46 PM
Sebastian said...: The AOC line shows that progs have no problem destroying the autonomy of citizens as long as the autonomy of women's bodies is protected.; 1/7/19, 2:46 PM
Bay Area Guy said...: Krugman is a super-hack. And, he probably wants to get into Castro-Cortez' dance pants.

Well, Jeez, don't hold that against him:); 1/7/19, 2:52 PM
Hey Skipper said...: [Freder:] Assuming that you could get your employer to agree to you working fewer hours or let you stop work for the year in August.

No assumption. I call in sick. I call in fatigued. I call in Hell No.

They could fire me, I suppose. Along with everyone else calling in Hell No.

Your point of view is very progressive: my labor belongs to the state.; 1/7/19, 2:52 PM
Hey Skipper said...: Oh, and a head not to Balfegor.

His answer is better.; 1/7/19, 2:53 PM
Freder Frederson said...: Where do you get the $52000?

I admit that is confusing. He says he currently makes $330,000. He would be paying an additional $28,000 on the income above $250,000 (assuming $250,000 is when the current 35% kicks in), so he would be losing $24000 in additional income after taxes since he is refusing to accept more than $250,000 in pay.; 1/7/19, 2:55 PM
Balfegor said...: Re: John:

Many people making $200k are w-2 salary employees and they often can't adjust their workload/slary down from $200k to $180k. It's often all or nothing.

Sure, but I don't think that was Hey Skipper's point -- he's presupposing a level of flexibility in overall compensation arrangements, hence his comment that at a 70% tax rate ($0.30 on the dollar), it's not worth it to him to continue work. In the longer term, you'd expect work hours and salaries to adjust to that reality, since people, particularly in skilled professions, will negotiate salary and work conditions that meet their needs.; 1/7/19, 2:56 PM
Bay Area Guy said...: The Left is clueless and dangerous. AOC says she doesn't want a Venezuela, but a Sweden.

Sweden?

Population: 10 Million

Demography: 98% white blond Lutherans who look like Elke Sommer.

AOC and her ilk, if ever they got power, would wreck this country, despite their "good" intentions.; 1/7/19, 2:56 PM
Gk1 said...: Balfegor this presumes Millenials are even paying attention much less can coalesce around a newbie in yoga pants and a twitter account. I will give you that she is easy on the eyes and has a voice not as grating as a dryer full of pennies but that's not much to go on. It's particularly annoying when the adults are having a conversation about important things. I feel the whole AOC hype is a distraction because Russiagate has fizzilled and the democrats policy pantry is bare. Other than pointless envy and class warfare what do they have?; 1/7/19, 3:00 PM
My name goes here. said...: Where do you get the $52000?

I admit that is confusing.

It's not. Your math is wrong.

He says he currently makes $330,000. He would be paying an additional $28,000 on the income above $250,000 (assuming $250,000 is when the current 35% kicks in), so he would be losing $24000 in additional income after taxes since he is refusing to accept more than $250,000 in pay.

Yes, you asked him why he would "throw away" $52000 in income, when he would really be "throwing away" $24000.; 1/7/19, 3:02 PM
daskol said...: That's why you co-opt the aspects of her program that have populist appeal, and package it together with a pro-growth, pro-America platform. The higher marginal rate for very high earners, and/or some adjustment to address financial types who pay almost no income tax today on their substantial earnings, are good politics. Trump also likes them, especially the latter idea. These ideas are broadly popular, which is also why AOC is leading with the high earner tax. She raises the tax increase because it's popular with some and infuriating to others, and despite the fact that from a revenue perspective it won't provide much to pay for her agenda, it will inflame all the right people, who will agitate about the principle of it. We're way past principles.; 1/7/19, 3:03 PM
Nonapod said...: Many people making $200k are w-2 salary employees and they often can't adjust their workload/slary down from $200k to $180k. It's often all or nothing.

That may be true over a short term, but the market doesn't exist in some perfect state where one change has no effect on the other variables. If suddenly there was some new massive tax increase on people making greater than 200k, obviously there would be adjustmentsmade by both the employers and the employed. Depending on how the math works out, you may even see average salaries go down to avoid getting into the higher, more punative tax bracket. Or people may switch to more part time work, deciding that their time is better spent with their families or hobbies or whatever if they only net a negligable amount of additional money for working full time. Ultimately the market will bare what it will bare.; 1/7/19, 3:03 PM
Jim at said...: Assuming that you could get your employer to agree to you working fewer hours or let you stop work for the year in August.

Freder thinks everybody who works actually works for somebody else.

That might explain his ignorance.; 1/7/19, 3:07 PM
Floris said...: Why is no one talking about the immorality of these high marginal rates? At some point, tax rates become so high that they are the equivalent of slavery. It is immoral for the government to take that much money from a person. And, as was historically true, it's the Democrats who are on the opposite side of the issue from the slaves.; 1/7/19, 3:12 PM
exhelodrvr1 said...: " But maybe at $50/hour (75% taxation), the marginal income just isn't worth the time you expend"

Or, you get paid under-the-table; 1/7/19, 3:15 PM
walter said...: I would love to ask her if items in stores should have different prices based on buyer's income or wealth.; 1/7/19, 3:17 PM
walter said...: (For the sake of argument, and to spare her head exploding, willing to exclude EBT issues); 1/7/19, 3:19 PM
WK said...: My 15 year old daughter worked 2 minumum wage jobs this summer. I asked her what she thought would happen if the minimum wage was raised to $15. She said that there would probably not be two high school age employees at a time working at the community pool snack bar like there was this summer. She kinda gets the economics of minimum wage. Also realizes that babysitting pays better and there is no stub with deductions associated with the earnings. Experience is a great teacher.; 1/7/19, 3:19 PM
Sigivald said...: "Nobel laureate in economics and arguably the world’s leading expert on public finance. (Although Republicans blocked him from an appointment to the Federal Reserve Board with claims that he was unqualified. Really.) "

The FRB isn't a "public finance" entity, and a Nobel doesn't make you qualified to be on its board.

Krugman seems to confuse his Nobel (which I am led to believe was well deserved for his work on trade) with a grant of Plenary Economic Competence.

This is as stupid as thinking that a Physics Nobel makes one an expert in every aspect of physics, rather than the actual area of expertise - or worse, in the case of the man in question, thinking it makes one a good engineer.

The Fed's inflation-targeting (which is basically its entire Goddamn Job, to keep inflation low and predictable) is not something a Nobel for public finance work has ... much if any bearing on.

Krugman is a hack at the Times, precisely because he's trying to use his Nobel to color his work far outside of his expertise.; 1/7/19, 3:23 PM
Hey Skipper said...: [Freder:] I admit that is confusing. He says he currently makes $330,000. He would be paying an additional $28,000 on the income above $250,000

It isn't at all confusing. My top income dollars are already cut by 35% — about a third of my annual salary is taxed at 35%.

Now, assume that progressive lootery would be as voracious as it has always been, and a significant chunk of that third of my salary is now taxed at 70%.

So instead of getting paid roughly $300/hour for those additional hours, I'm only getting $90/hour.

Lots of guys will call in sick. The company will call other guys to fly extra time — which will get taxed at 70% — which they don't have to do, and won't do.

This is how socialist paradises turn into such shitholes.; 1/7/19, 3:27 PM
Mark said...: What happens with high confiscatory rates of income taxation -- and maybe some have already mentioned this -- is not that employers pay those high earners less. Rather, people simply work less. That is, they produce less. Less production slows the economy until it eventually kills it.

Certainly in my case, it no longer was worth my time and trouble to work more simply to give over half of my money to the government. That is, for me to work an hour for myself, and then have the government own my labors for another hour. My time became more valuable to me than that slave wage. So I cut back my hours. I produced less. I provided fewer services to other people.

High taxation encourages lower production.

With lower taxes, on the other hand, more people are willing to work more hours because they get to keep more of their money.; 1/7/19, 3:38 PM
Unknown said...: > you'd expect work hours and salaries to adjust to that reality

Or salary is shifted to benefits which are tax favored

- retirement contributions, cadillac health care, stock sharing plans...

In other words "inefficiently allocated".

Everything is now about tax avoidance, which puts politicians in charge of handing out favors.

Remember when Pelosi's friends got exemptions from Obamacare?; 1/7/19, 3:43 PM
Mark said...: The optimal tax rate on people with very high incomes is the rate that raises the maximum possible revenue.

Try to raise things like the Laffer Curve with these people could get you burned at the stake.; 1/7/19, 3:46 PM
Unknown said...: > why not pass a law that says they have to pay X percentage of their top line revenues toward employee compensation... But it's an idea I was kicking around for a long time. I've never heard anyone else seriously consider it.

Ah, utopia, where our every whim become reality.

top line - Wonder why do wall st companies always make earnings to the penny?

But Mexico and India sends thanks - they would love to be gifted a huge, artificial cost advantage in labor!; 1/7/19, 3:47 PM
Pettifogger said...: If tax rates near 1950s levels, then either from the start or soon afterwards, we'll see many fringe benefits excluded from taxable income--as was the case back in the day. Congress critters who resist that will find the pressure intense.; 1/7/19, 3:48 PM
rehajm said...: AOC says she doesn't want a Venezuela, but a Sweden.

AOC wants to cherry pick the parts of Sweden she likes- the huge social safety net from the early 1990s. Unfortunately it was unsustainable as Sweden's debt to GDP ran in the 90% range because of it. They had to cut back on all the goodies. AOC doesn't want that Sweden.

Though she doesn't say it what she really wants is Puerto Rico.; 1/7/19, 3:52 PM
n.n said...: Why not just print the money? It would stimulate the economy. The issues are then finitely available and accessible resources, fair treatment of individual productivity, and progressive misalignments forced by central management of each. Of course, that happens anyway with asset inflation, fake-valuation of internet properties, monopolistic practices, immigration reform, etc.; 1/7/19, 3:58 PM
Freder Frederson said...: This is how socialist paradises turn into such shitholes.

You mean like that shithole Denmark?

I don't see how this is so hard to understand. Suppose you have to work 100 extra hours to get $20,000 more in income. That's worth it to you at $200/hour. Maybe it's still worth it to you at $100/hour (50% taxation. But maybe at $50/hour (75% taxation), the marginal income just isn't worth the time you expend. Because there's always other things you could be doing with your time. You could be spending time with family. Or reading a book or something. And that might be worth more than $50/hour.

Your examples of what depict a hellscape. Oh my God, some people might forgo higher salaries to spend more time relaxing, maybe volunteering, or God forbid, more quality family time. Oh, the horror!

I don't know what you conservatives want, when women forgo staying at home to build a career, it is the end of civilization, but if you decide to work and earn less to spend time at home we are on a certain downward spiral to shithole status.

It isn't at all confusing. My top income dollars are already cut by 35% — about a third of my annual salary is taxed at 35%.

So apparently you are single. So the extra $24k a year (since you would cut your current salary from $330k to $250K) in your example might be the difference between a base 911, or God forbid a Boxster, and a GT3. Maybe it would force you to consider a Corvette instead. Which of course would mean your money would be going to Detroit instead of Suttgart, which would make Donald Trump very happy.; 1/7/19, 4:08 PM
eddie willers said...: AOC says she doesn't want a Venezuela, but a Sweden.

"Nn, no, no...not that yucky brown socialism, but that wonderful white socialism".; 1/7/19, 4:11 PM
Freder Frederson said...: Freder thinks everybody who works actually works for somebody else.

That is not what I said at all. I was dealing with Hey Skipper's personal example. He clearly stated that he is a pilot for a major airline. So he actually does work for someone else.; 1/7/19, 4:12 PM
tcrosse said...: You mean like that shithole Denmark?

Diversity is its strength; 1/7/19, 4:17 PM
Jim at said...: That is not what I said at all. I was dealing with Hey Skipper's personal example.

That doesn't change the underlying point. If someone is going to be punished by the State taking more, they will find a way to keep the State from doing so.

That's what you don't seem to understand.; 1/7/19, 4:26 PM
Jim at said...: She said that there would probably not be two high school age employees at a time working at the community pool snack bar like there was this summer.

That was my first lesson, as well.

Many (many) years ago, there was an initiative to raise the minimum wage. When asked to sign the petition - as a member of the target audience - I realized those three minimum-wage jobs would become two. I politely declined.

It's amazing there are still people who don't grasp basic economics and human nature.; 1/7/19, 4:31 PM
SeanF said...: Freder Frederson: Your examples of what depict a hellscape. Oh my God, some people might forgo higher salaries to spend more time relaxing, maybe volunteering, or God forbid, more quality family time. Oh, the horror!

The point is that the purported reason for the tax increase is to increase government revenue. But if people choose to forgo the extra compensation because it's taxed too high, then you not only don't get the additional revenue you wanted, but you lose the revenue you were getting at the lower tax rate. It's not a question of whether people working less is good or bad.

And on a general note for all - the issue is not simply what people currently making that much money would do, but what the people in the following generations will choose to do when they find themselves approaching that income level.; 1/7/19, 4:32 PM
Hey Skipper said...: [Freder:] He clearly stated that he is a pilot for a major airline. So he actually does work for someone else.

Exactly.

No explain why I would work for government for $90/hour.; 1/7/19, 4:32 PM
Rusty said...: Blogger Freder Frederson said...
"Yellow vests are active and Cali is starting the same thing.

Which is a completely nonsensical statement in this context. The yellow vests are protesting taxes and policies that make it difficult to live on a working class salary (e.g., VAT, fuel taxes, low wages). Why should they care (in fact they should advocate) if the richest people in the country pay 70 or 80% as a top marginal rate."

I know tthis sounds cray, but even in France lower and middle class people work for or depend on rich people spending their money. Not everyone pays prix fixe.; 1/7/19, 4:35 PM
Jim at said...: but if you decide to work and earn less to spend time at home we are on a certain downward spiral to shithole status.

You just don't get it. And you never will.; 1/7/19, 4:38 PM
Michael said...: FrederF
You appear to be a salaryman and would never be impacted by the top rate. Given your example I would guess you would continue to work for ten cents on the dollars should you ever reach that level.

As to the idea of a high marginal rate I encourage the Dems to go for it, especially justifying on the basis of 1950 examples. Perhaps we could bomb all the factories in Europe and Asia to square up that example.; 1/7/19, 4:40 PM
Freder Frederson said...: The point is that the purported reason for the tax increase is to increase government revenue. But if people choose to forgo the extra compensation because it's taxed too high, then you not only don't get the additional revenue you wanted, but you lose the revenue you were getting at the lower tax rate. It's not a question of whether people working less is good or bad.

For the record I will agree that a 70% top marginal rate, especially on the levels of income a lot of you, and in particular My Skipper, are fearmongering about, is a bad idea. I might be willing to impose such a rate on very high incomes (I'll throw out $10 million a year and we can discuss from there), but $250K or even $500K is ridiculous and defy you to find me a serious proposal that would raise the rate to 70% at that level. Yes, the Laffer Curve has validity, but the problem with it is the optimum rate is never shown on the x axis.

But on the other hand, your apparent belief that what are still on the right side (i.e., cutting taxes even more will result in the cuts paying for themselves) of the peak is equally absurd. Even the Reagan tax cuts (where the top marginal rates were indeed in the range of 70%) did not pay for themselves. And Trump's tax cuts (where many people who are partners in LLCs will see a huge tax cut as they will be paying at the corporate, not the individual rate) are not, and will not, "pay for themselves" either.; 1/7/19, 4:59 PM