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:

«Oldest   ‹Older   201 – 280 of 280
Drago said...

Field Marshall Freder: "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."

LOL

So stupid only LLR Chuck would buy into it.

JFK cut marginal tax rates: Tax revenue to the govt increased.

Reagan cut marginal tax rates: Tax revenue to the govt increased.

W cut marginal rates: Tax revenue to the govt increased.

Trump cut marginal rates: "Go Figure: Federal Revenues Hit All-Time Highs Under Trump Tax Cuts"

https://www.investors.com/politics/editorials/trump-tax-cuts-federal-revenues-deficits/

Gee, if only we had some real world examples of where cutting marginal tax rates increased revenues to the govt.....and if only we had examples where govt's instituting higher taxes lost revenue....

It's all so very, very, very hard.

Apparently, it's every bit as hard as reading the actual results of a Federal Case against Cliven Bundy!

Seeing Red said...


AOC says she doesn't want a Venezuela, but a Sweden.


Sweden doesn’t have Swedish socialism. That’s gone and even when they had it if they were state they be in the bottom five

SHe is embarrassing she should be living in the 21st-century not the mid 20th.

Seeing Red said...

Even the Reagan tax cuts (where the top marginal rates were indeed in the range of 70%) did not pay for themselves."


As an individual who lived thru that....

My personal experience

God I loved the 80s.

Hey Skipper said...

[Freder:] 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 fear mongering about, is a bad idea.

This isn't fear mongering, it is making completely valid conclusions based upon the unbroken history of class warfare. You might draw the boundary at the 1%, but once having done so, you have no grounds for objecting to extending the 1% to the 3%, and from there to 5%, and so on.

Why? Because progressives in their dreams have already spent 12 times every cent the top 1% earn. Lootery is insatiable.

Look at it a different way. How much do I, and those who are similarly situated — doctors and dentists, for two examples — have to pay to the government in order to the system to be fair to us?

To a fairly reasonable extent, it is easy to make a plausible argument for a progressive tax system. Yes, I am lucky. Yes, I agree that due to my luck, noblesse oblige is all the reason I need to pay disproportionately more than someone who earns a sixth of what I do.

But that is not an argument without limits.

At some point, looters are going to demand so much that those caught within the looters grasp will just stop.

That point isn't merely revenue maximising, but rather that point which is not only defensibly fair, but recognizes that the private exploitation of legally and ethically earned resources also has social benefits.

Should Krugman, and you, have their way, then Cessna goes out of business. The Corvette factory in Kentucky closes. Granite quarries and stone cutters join the unemployment rolls.

In their stead, government subsidizes dysfunction and inefficiency.

What do progressives have against workers?

Unknown said...

You know, Democrats.... back in the day, Slaves were actually paid, you know. Whether it was an actual salary (seldom) or basic food and minimal clothing, their work was not free to the slaveowner.

Freder and AOC seem to want to go back to the days where work only got you mere pennies, or even just minimal food and board, while Democrat slaveowners (then) or Democrat politicians (now) get all the benefit of that labor.

Freder has not explained why Government should get the output of my labor--I work 3 hours for Nancy Pelosi for every one hour I work myself? Bugger that!

It's times like these I like to remind the left that God requires 10%. Why do they need 75%? The left claims they are better than God anyway, why can't they just take 10%?

--Vance

Leora said...

Historically, the percentage of GDP collected through income tax in the United States is remarkably stable regardless of rates. Setting the rate low with few legal deductions is the way that creates the most incentives for growth and is also the most fair. I speak as one who made my living designing tax advantaged real estate investments for a number of years.

I would also remark that wealthy people don't need to have taxable income and if rates are high enough they will structure their affairs so they do not. Those low executive salaries were accompannied by the most amazing perks of the sort enjoyed by executives of non-profit organizations today.

walter said...

http://www.freetochoose.tv/program.php?id=sweden

John Stossel asks Norberg why so many Americans think Sweden is socialist. Norberg answers, "We did have a period in the 1970s and 1980s when we had something that resembled socialism: a big government that taxed and spent heavily."

But big government led to problems. "Our economy was in crisis, inflation reached 10 percent, and for a brief period interest rates soared to 500 percent. At that point the Swedish population just said, 'Enough, we can't do this,'" Norberg says.

Sweden cut public spending, privatized the national rail network, abolished certain government monopolies, eliminated inheritance taxes, sold state-owned businesses, and switched to a school voucher system. It also "lowered taxes and reformed the pension system," adds Norberg.

So Stossel asks why we keep hearing "that Sweden is this socialist paradise."

Norberg answers: "We do have a bigger welfare state than the U.S. and higher taxes than the U.S. But in other areas, when it comes to free markets, when it comes to competition, when it comes to free trade, Sweden is actually more free market."

He's right, according to the Heritage Foundation's Economic Freedom Rankings. Sweden ranks higher than the U.S.

Norberg also tells Stossel that Sweden's tax system may surprise Americans. "This is the dirty little secret....We don't take from the rich and give to the poor. We squeeze the poor, because rich people might leave."

Even people who earn below average income pay up to 60 percent in taxes.

Stossel asks: What lessons should Americans take from Sweden?

"You can't turn your backs [on] the creation of wealth," warns Norberg.

Douglas B. Levene said...

Instapundit reports that in 2004, Krugman told a meeting of the Southern Economics Association that the 70% marginal rates of 1980 were "insane."

Gk1 said...

Walter beat me to it. John Stossel's interview should be required watching for our Millennial children. The only thing new in the world is the history you don't know. Its funny how the press will quickly fact check by interviewing Finnish people about "raking" the forest floor to embarrass Trump but are nowhere to be found when their latest progressive hearthrob weighs in on copying the economic policy of certain scandinavian countries. Gee you would think some cursory curiosity of what AOC means about turning the U.S into Sweden would merit a fact check or two wouldn't you?

Mark said...

Freder has not explained why Government should get the output of my labor

When it comes down to it, the only reason is that Government is pointing a gun at you, saying, "Give me your money." That's why.

Freder Frederson said...

Gee, if only we had some real world examples of where cutting marginal tax rates increased revenues to the govt.....and if only we had examples where govt's instituting higher taxes lost revenue....

The question is not whether revenues rise after a tax cut (which if the economy is growing, they probably will) it is whether the tax cuts raised the GDP enough that the government raises more revenue (or at least the same revenue) than it would have without the tax cuts. And the consensus belief is that recent tax cuts did not achieve that goal.

And I specifically limited my examples to Reagan and later. Throwing in the JFK cuts is not relevant.

Freder Frederson said...

Oh, and Drago you forgot.

Clinton raised marginal tax rates: tax revenue to the govt increased.

Sorry to piss in your cornflakes.

PuertoRicoSpaceport.com said...

So Bump the marginal rate to 70%.

I wonder how much additional income tax the economic geniuses think Jeff Bezos would pay?

Currently worth more than $100,000,000,000. What's your best guess on how much more he would pay with a 70% tax rate?

$500mm? $1 billion? Any significant part of his wealth?

Anyone want to hazard any actual dollar amounts?

Come on, be brave.

John Henry

PuertoRicoSpaceport.com said...

Mark,

Perhaps we could chip in and buy Freder a copy of "The Law" by his namesake Freder[ic] Bastiat. He has apparently never read it.

It is about the question: "Why is it moral for me to take from my neighbor indirectly via govt when it would be immoral to do it directly?"

I suspect that even Freder would agree that it would be immoral to use a gun to take his money to run a soup kitchen.

But he would have no problem using the govt's gun to run the same soup kitchen. (Correct me if I am misreading you on this, Freder)

John Henry

Freder Frederson said...

Look at it a different way. How much do I, and those who are similarly situated — doctors and dentists, for two examples — have to pay to the government in order to the system to be fair to us?

A top marginal rate of 45% seems fair to me. We can quibble about at what income that rates kicks in, but your salary probably wouldn't be subject to it.

PuertoRicoSpaceport.com said...

Squeamish

Squeamish

Squeamish

=======

Please ignore. Testing a new app.

John Henry

PuertoRicoSpaceport.com said...

Blogger Seeing Red said...

AOC says she doesn't want a Venezuela, but a Sweden.

Is AOC OK with the Muslim no-go zones in Sweden? Is that what she wants for the US?

https://www.youtube.com/watch?v=pochreLwrQs

https://www.thelocal.se/20170621/no-go-zones-what-you-need-to-know-about-swedens-vulnerable-aeas

Excuse me, not "no-go zones" They are vulnerable areas.

Into which you can't go.

John Henry

Freder Frederson said...

But he would have no problem using the govt's gun to run the same soup kitchen. (Correct me if I am misreading you on this, Freder).

How is it moral that the gov't's gun is used to protect my private property or that if I have a piece a paper that says I own a piece of land, they will defend it for me and defends me from my neighbor dumping his shit on it? Or that because the government charters a a corporation my personal risk is limited to what I invest in it?

If you want to live in anarchy, be my guest.

Taken to its logical conclusion, that is where that argument takes you.

Hey Skipper said...

[Freder:] A top marginal rate of 45% seems fair to me. We can quibble about at what income that rates kicks in, but your salary probably wouldn't be subject to it.

That's two unjustified conclusions.

Equipment Maintenance said...

Wow. Some people work less as the tax rate increases. The higher it goes, the more likely they are to cut back on their productivity, and, of course, the taxes they pay. Seems like there should be some kind of graphical curve to show this.

Unknown said...

Did Freder just say that the government forcing you to pay over your fairly earned money at the point of a gun is exactly the same as the government protecting your property from a bunch of thieves?

Freder, you may want to look at who is the thief in each scenario. That you cannot see a difference is quite, quite telling.

And I second the recommendation of Bastiat--someone who clearly saw the errors of socialism long ago, even while Marx was alive I believe.

--Vance

daskol said...
This comment has been removed by the author.
ccscientist said...

When tax rates were high, corp "paid" top executives by owning a beach house and boat for them, as corp expenses (the CEO took some friends there to justify it). High taxes is where the idea of paying for health insurance came from.

The idea that the rich "owe" something is sick. Unless the person gets rich via government favors, the only way to get rich in the US is to produce something people need or want. No consumers are captive. You don't have to buy an iPhone or Lexus. You buy it because it is a great product or a cheap product. There is no way for a corp to steal your money, in spite of what the resentful say.

Krugman is barking mad. He contradicts what he wrote in his own textbook re effects of min wage for example and said the stock market would never recover from Trump being elected. Whatever he says, bet on the opposite.

Matt Sablan said...

I may have missed it, because I'm not reading 200+ comments, but was Krugman recommending a WW3 to help promote some economic improvement like after WW2?

daskol said...

End the carried interest meshugas, and raise marginal rates for very high earners, say > $10M. Don’t get bogged down in the principle of it, because the first part is principled, and both represent a cheap way to win over people concerned with fairness. It won’t raise much revenue, but that’s ok, because the objective is political rather than fiscal.
Anyway, spending is a totally different issue that is unconnected to revenue. What will the Dems have to offer is this is co-opted, and GOP becomes the party of economic fairness and “justice?” Most of the Wall St. types who will get hurt are coastal dwelling Dem supporters—same crew who ate the SALT.
Then put an excise tax of over 50% on the first couple years of post-government wages for officials riding the revolving door. Glenn Reynolds has a good suggestion for taxing Hollywood. Trump already lowered taxes. That was a meaningful and economically beneficial policy change. Now play in the margins economically, but in the center of the political and cultural game. The populist and smart thing to do is find some tax increases we can all get behind now. They’re out there, they won’t hurt our growth and done right, it will not only be good politics, but good fun. Call their bluff, raise the stakes. This is politics not church—have some fun with it. Trump is.

320Busdriver said...

We are getting close to having enough states that have called for an Article V convention where at least a balanced budget ammendment can be voted on. Plus term limits.

We need both....badly

Freder Frederson said...

Did Freder just say that the government forcing you to pay over your fairly earned money at the point of a gun is exactly the same as the government protecting your property from a bunch of thieves?

If you want to put it that way, yes. If the government cannot force you to pay over a portion of your fairly earned money, then who is going to protect you from the thieves? Or for that matter, who is going to ensure that your property actually belongs to you?

Is the deed to your house valid because you have a private contract between yourself and the seller? Of course not, otherwise the only property you could "own" is that which you, or your associates, can personally protect.

And that my friend is the definition of anarchy. No matter how much Libertarians try to polish their shiny turd with ridiculous hypotheticals.

That's two unjustified conclusions.

They are not unjustified conclusions. Someone (and I am too lazy to go back and check who) asked me what I considered a fair amount, so I gave you a number of what I consider "fair". 45% top marginal rate starting at somewhere above your current salary. If you want a specific number, let's say 500K (which is actually when the top rate kicks in for married couples). Again, I am open to arguments to either raise or lower that number.

daskol said...

Dems won the House. They want tax increases. Give them tax increases!

Freder Frederson said...

Glenn Reynolds has a good suggestion for taxing Hollywood.

I would like to see Glenn's proposal for taxing (or providing a mechanism to fire) tenured state university law professors who waste their time running a blog instead of doing the job that the state of Tennessee (or Wisconsin, California or Virginia) is paying them to do.

daskol said...

Freder, do you think the Dems—rank and file, if not top leaders and donors— would get behind a tax reform bill that did away with the rules that allow investment professionals to pay only the capital gains tax rate on the bulk of their annual earnings? If it were crafted carefully to target investment pros who are basically avoiding income tax because of the tax structure of the investment vehicle they work for? Imagine how that would make Schumer and Pelosi squirm.

PuertoRicoSpaceport.com said...

Blogger daskol said...

raise marginal rates for very high earners, say > $10M.

So you'd leave Bezos alone then? No tax increase for him?

Freder, what say you? Are you OK with Bezos only paying $2-3mm in taxes?

John Henry

daskol said...

Glenn Reynolds appears to have sufficient energy to be productive as both a professor/scholar and blogger, and anyway he’s running a group blog now. He probably files a pretty hefty 1099 already.

Josephbleau said...


Blogger 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.

This reminds me of the old story of a woman who sees an old school friend on Boston Common, obviously plying the oldest profession. My Dear, I have to say you have fallen on hard times since our years at Sarrah Lawrence! What happened? Well, it was either this, or dip into capital.

daskol said...

John Henry, Bezos doesn’t collect much of a salary, never has since he started Amazon. I don’t know how one taxes a Bezos. I’m just glad for now he’s cool with letting me do my thing.

Birkel said...

Freder Frederson thinks the state guarantees property rights.
Quaint.

Samuel Colt helped more than the thievish government ever did.
Thanks, 2Az

daskol said...

Even his investment income would be hard to tax I imagine, the stuff he’s pulled out of Amazon as part of his diversified approach tot total world domination. At least he paid some tax when he sold shares.

Seeing Red said...

A top marginal rate of 45% seems fair to me.

Add on state and local taxes and FICA.

Freder Frederson said...

Add on state and local taxes and FICA.

FICA maxes out well below the income level I suggested. And when or where did I say state and local taxes should not be deductible?

Samuel Colt helped more than the thievish government ever did.
Thanks, 2Az


Not only is this untrue but it demonstrates my point. If you will recall, most of the land that Samuel Colt helped defend was stolen (or if you are being generous, obtained under threat of extermination) from its original occupants. If you are depending on Samuel Colt to ensure your property rights then your "property" rights only extend to what you can personally protect.

daskol said...

The way to tax Bezos, which is probablya decemt way to tax everyone else too, is a consumption tax. Stop taxing income and earnings altogether, and hit people up when they spend their money. Wouldn’t need an IRS at all, and the govt wouldn’t need to know anything at all about how or how much one earned. Combined with a rebate covering some amount that one needs to spend just to subsist comfortably, even one of those nonrefundable ones that get paid to everyone (a stipend covering necessities) , it could even be preogressive. But that’s a bit radical as a next step, even if we end up there in the not too distant highly automated future.

Freder Frederson said...

Freder Frederson thinks the state guarantees property rights

And I will go beyond that. Without a state there is no such thing, beyond what you can defend with physical force, as "property rights".

daskol said...

Would be environmental too: you get less of what you tax, generally. So taxing buying stuff should lead to people buying less stuff, at least initially. There will be a run on those books about Japanese decluttering maybe, but most other stuff might look less attractive at the outset.

320Busdriver said...

Talking marginal rates sounds so confiscatory. What is a fair effective rate? I just double checked the 17 1040 and am surprised..I like keeping more of my money, like everyone here, but in an expanding economy we probably should not be seeing high deficits. A balanced budget ammendment will help these cretins. Good Lord we can't allow people like AOC control the purse.

daskol said...

Incentives will compel people to evaluate something like the “better than doing nothing” standard popular around here: is buying it better than not buying it becomes a richer, deeper question many more people will ponder more deeply than we need do today.

daskol said...
This comment has been removed by the author.
John said...

If you make hire Americans at the going rate that will cut my income by 90%. I’m just going to stay home.

Explain how that’s different? Burdensome government preventing me from hiring the best and cheapest employees I can find. Who are they to tell me who I can hire?

John said...

If you make me hire Americans I mean...

daskol said...

20, no matter how much revenue the govt takes in, spending is going to increase faster. There’s a mismatch between timelines of people’s political careers and consequences of fiscally irresponsible behavior. Our politics have become the arbitrage of that gap, probably until some kind of fiscal crisis raises concsciosuness on this point, when we actually run out of money to pay for stuff lots of us need. This potentially protracted govt shutdown is like a preview of that. What are the checks we cut that really matter. When some of those can’t be cut, fiscal responsibility will suddenly become very urgent.

1

320Busdriver said...

Well with rising interest rates spending will certainly increase exponentially, unfortunately that is just to service the debt.

John said...

It sure seems like Trump pointing out how gleefully corporate America imports illegal, H1Bs, J1s, etc and offshores production has really undermined the the idea that the rank and file and the job creators have a lot in common.

Reading through the comments the certainly just isn’t there anymore.

PuertoRicoSpaceport.com said...
This comment has been removed by the author.
PuertoRicoSpaceport.com said...

Blogger daskol said...

John Henry, Bezos doesn’t collect much of a salary, never has since he started Amazon.

Yeah, I know. I tried to look it up earlier and find it is about $80,000/year.

I also remember digging a bit deeper a year or two ago and finding that his total taxable income is around $3-4mm/yr.

either way, not a lot of blood can be wrung from that turnip.

I asked it as a trick question since so many here and elsewhere can't seem to tell the difference between "income" and "wealth".

The big difference is that income is taxed and wealth is not.

Put the tax rate up and people will choose to increase wealth (tax-free) rather than income (taxable)

there is only a very loose connection between income and wealth. Lots of wealthy, low income people. Buffett used to earn about $150,000/year. Bezos is exhibit. I suspect that a lot of Wisconsin farmers are land rich and income poor.

OTOH, there are lots of people with high incomes who spend it faster than they get it. So high income, low or no wealth.

Want to tax wealth? Anyone think a Constitutional amendment to do that would pass? That's what it would take.

John Henry

PuertoRicoSpaceport.com said...

daskol said...

Even his investment income would be hard to tax I imagine, the stuff he’s pulled out of Amazon

Has he sold any of his Amazon stock? Ever?

Been a year or two since I looked but I think he has never sold any.

He doesn't need to. He can just use it as collateral for loans to finance Blue Origins, WaPo etc. No sale, no gain, no tax. Like when you take out a 2nd mortgage on the house.

And since Amazon, as a matter of corporate policy, has very little taxable income (profit) the corporation pays not a lot in taxes. As a percentage of revenue.

John Henry

John said...

Want to tax wealth? Anyone think a Constitutional amendment to do that would pass?

Huh? We already have a wealth tax. It’s a tax on real property aka a property tax.

Sebastian said...

@Freder: ""This is how socialist paradises turn into such shitholes." You mean like that shithole Denmark?"

As you know, my basic criterion for an honest leftie it whether s/he argues for Scandinavian taxes to support a Scandinavian welfare state. In Denmark, that would mean about a 50% lowest-tier tax rate on the poor and middle class and a 25% regressive VAT. How 'bout it Dems?

While we're at it, let's adopt Danish policies dealing with unwanted illegal immigrants, like setting up an offshore concentration camp to round them up and ship them out.

John said...

He doesn't need to. He can just use it as collateral for loans to finance Blue Origins, WaPo etc.

Ask Bernie Ebers (aka inmate #56022-054) how that worked out... There are of course countless others who have been ruined by the same plan.

John said...

In Denmark, that would mean about a 50% lowest-tier tax rate on the poor and middle class and a 25% regressive VAT. How 'bout it Dems?


Sure - but of course you’re not being honest unless you consider the actual value of your employer sponsored health insurance, college for the kids, disability insurance, long term care insurance, etc. it’s not like you pay 50% and and are paying $1200/month for health insurance or putting $250/per month away per kid in your 529, etc.

Rusty said...

Where is my incentive to excell at what I do if all my efforts are taxed away. Why innovate? Why research? Why explore?



Howard said...

Blogger Rusty said...

Where is my incentive to excell at what I do if all my efforts are taxed away. Why innovate? Why research? Why explore?


A man does it because "it's there". If you do those things for the money, you are just another get rich quick shyster. You write like you don't understand real power and success, only the phony impotent working of angles to skim off vig sort of power that is empty and does nothing to advance our culture.

Josephbleau said...

Frederr, you have a deep misunderstanding of how modern weapons made the weak equal to bullys.

Josephbleau said...

Howard, try to peddle your BS at the AFLCIO.

Josephbleau said...

AFLCO Motto, Don't work on company time, don't take a shit on your own time.

PuertoRicoSpaceport.com said...

Bezos 2017 salary was $81,840. plus $1,600,000 "All other compensation"

His salary in 2016 and 2015 was the same.

The footnote says, of the "all other compensation":

Represents the approximate aggregate incremental cost to Amazon of security arrangements for Mr. Bezos
in addition to security arrangements provided at business facilities and for business travel.
(etc)

I suspect that this is not taxable income to Bezos.

In any event, $1,681,840

He has almost 79,000,000 shares of Amazon but they pay no dividend, so no income there, either.

From the 2018 proxy statement

https://ir.aboutamazon.com/static-files/3af60b72-8be7-4dad-aef9-dd87b94a60f0

Page 22

Strikes me that no matter what the tax rate, Mr Bezos will never pay very much.

That's fine with me. I just want him to keep on doing that thing he do so well.

John Henry

PuertoRicoSpaceport.com said...

John (the other John)

Are there any federal property taxes?

They are all state taxes and states can tax pretty much anyway they want.

the income tax was unconstitutional and required an amendment. A tax on wealth would probably be unconstitutional for the same reasons.

Hence the need for an amendment. As was required for the income tax.

John Henry

Sebastian said...

"disability insurance, long term care insurance"

Sorry. Forgot to add the 8% Danish social insurance premium. If you want choice and dental coverage, that'll be extra.

Considering their very low tax burden, the net benefits of the American poor and lower middle class outweigh those of the poor and middle class in Scandinavia.

Josephbleau said...

I had an interesting time financing my education, I worked as a miners assistant in an underground Uranium Mine in Ambrosia Lake NM during my summers and made about $3500 IN 1976. the mine was organized by the ocawu and each miner was a contractor who was paid per ton or per foot of development or per stull or roof bolt, for safety. The contract miner paid me, a lot of the pay was in beer.

Seeing Red said...

Run the numbers. If those countries were states where would they rank?

n.n said...

Whatever the solution, the special needs of high-density population centers, immigration reform (e.g. refugee crises), couples and children with shared responsibility, and those who have planned poorly by choice or no fault of their own, will need to be considered.

DavidUW said...

I didn’t read all of the comments. But two words. Top hat.

chickelit said...


P”I didn’t read all of the comments. But two words. Top hat.”

Minnick’s Top Hat?

Bruce Hayden said...

"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."

You cut taxes and get economic growth. You raise them and you get a recession. You raise them like Occasional-Cortex wants, and you get a major recession. Worse, I think, if they try to raise the corporate tax rates back up. But I don't think that she realizes yet that Trump and the Republicans drastically cut corporate taxes, so probably isn't yet advocating raising them back up.

Thanks to those corporate tax cuts, we are finally liquidating excess cash. We have a plan to pay it out over the next five years as (qualified) dividends. If OC gets her tax increase, I expect that we will immediately accelerate the distributions, completing them by year's end at the latest. And then invest it counter cyclically, with the expectation of at least a recession, if not small depression.

Hey Skipper said...

[Sebastion:] As you know, my basic criterion for an honest leftie it whether s/he argues for Scandinavian taxes to support a Scandinavian welfare state. In Denmark, that would mean about a 50% lowest-tier tax rate on the poor and middle class and a 25% regressive VAT. How 'bout it Dems?

I happen to live in Germany. Where everyone pays 20% VAT on almost everything. In addition to having very high tax rates. And frighteningly expense gas.

But it isn't a patch on Denmark, where I go frequently (like tomorrow, for instance). Everything there is at least twice as expensive as in the US.

Hey Skipper said...

[Freder:] They are not unjustified conclusions. Someone (and I am too lazy to go back and check who) asked me what I considered a fair amount, so I gave you a number of what I consider "fair". 45% top marginal rate starting at somewhere above your current salary. If you want a specific number, let's say 500K (which is actually when the top rate kicks in for married couples). Again, I am open to arguments to either raise or lower that number.

When I say unjustified, I mean things aren't correct merely on account of your say so.

Our tax regime is already very progressive; the effective tax rate on the top 1% is eight times that of the lower 50%. The top 20% of earners pay 95% of federal taxes. So what is the point of creating a new bracket raising the top existing top rate by 8%?

And then there is the other issue you keep missing. Of course, there is some amount of government spending which is essential to a functioning society. And there is, in the US, a great deal that isn't. The answer to the latter isn't more taxes.

If the government takes even more money from high earners, simply because progressives can't get themselves enough class warfare, then that is less money for high earners to spend, thereby keeping people in productive jobs, or invest, thereby giving the economy more resources for the future.

There's such a thing as opportunity cost, about which Krugman and his fellow looters apparently know nothing.

rehajm said...

Why innovate? Why research? Why explore?

These things cost money. Where do you get the money if it’s taxed away?

Bruce Hayden said...
This comment has been removed by the author.
Bruce Hayden said...

"Why innovate? Why research? Why explore?"

"These things cost money. Where do you get the money if it’s taxed away?"

A good little socialist like AOC would probably say that the government could do the research. Or at least fund it. Which they already do, of course. But, what I don't think that she gets is that the government is horrid about investing in R&D. One reason for this is that decisions about what research to fund are made politically by the government, and not economically. AOC would probably see that as a feature, and not a bug. But that is because she is too young to have seen much of the sausage being made. My kid got their PhD last August, and much of the research their research group was doing was tangentially related to AGW/AGCC. That was where the money was. We all watched this play out, with this huge body of research growing around AGW/AGCC that never confirmed it directly, or even came close, but after awhile careers in and out of the government were being made going through the motions of proving AGW/AGCC. Eventually it became its own interest group, guaranteeing that damaging research didn't get funded, and if completed, didn't get published. Or look at NASA. We rushed to the moon, then what? Billions and billions a year, and we were ultimately faced with renting space from the Russians to get our people to and from the space station. By partway through Obama's tenure in the White House, Muslim outreach was considered a higher priority than manned space flight by the agency that put men on the moon.

What happened then? Some tech billionaires, who had read too much sci/fi, and weren't bound by NASA's institutional biases, realized that space IS the final frontier. One of them put up prize money, and off they went, innovating like crazy. What do multi billionaires do with all their money, the money that AOC wants to spend on welfare for Central American peasants? I remember when Bill Gates, then worth north of $50 billion got into a contest with Michael Dell to build the biggest house. Gates won, with one at 50k square feet. I don't think that it was even $100 million. And then a Boing wide body. Where else do you spend your money when your money? By changing the world. Soros and Steyer spend their much smaller fortunes buying politicians (much of the Dem's takeover of the House, and coming as close in the Senate, can be attributed to leftist billionaires and centimillionaires, apparently led this time, by Tom Steyer, trying maybe to atone for making his money in coal and other fossil fuels). But most of the really really rich people in this country made their billions in tech, which means that a lot of them have read a lot of science fiction. And while the really big money so far has been in computerization and networking our economy and social lives, they know that that money is peanuts compared to what can be made in space. While NASA is running around in circles, doing little of real value, there is, again, a serious race for space going on, and the government players are being left far behind. The US is winning that race, no thanks to NASA, because most of the big players are Americans. But it isn't just space. Gates and Buffet are spending their billions doing, in many cases, a better job at fighting disease in third world countries than the UN and all the first worldnational governments. We are seeing, before our very lives, as space travel becomes economic, and diseases like malaria are eradicated, why governments shouldn't be the ones determining and funding research and development - because they are lousy at it.

Bruce Hayden said...

"the government takes even more money from high earners, simply because progressives can't get themselves enough class warfare, then that is less money for high earners to spend, thereby keeping people in productive jobs, or invest, thereby giving the economy more resources for the future."

Class warfare isn't the ends, but rather the means to their desired ends, which is, essentially, rent seeking. Dem politicians, probably at least for the last century, and maybe for much of their two centuries, have gained and maintained power by playing demographic groups off against each other, and esp against the middle class. Countless politicians have made their fortunes by selling influence and taking advantage of their elected positions. The Clintons, of course, were the poster couple for this. When they entered the White House in early 1993, they were still taking tax deductions for donating their used underwear to charities like Goodwill. When Mrs Clinton lost the election in 2016, they had a personal worth over $100 million, and controlled a family foundation with several billion more. They are, of course, not alone. His VP, AlGore probably has double that fortune. Then there is Harry Reid, Diane Feinstein, Nancy Palsi, etc, who can attribute much of their fortunes to their political careers. The dirty little secret though is that white, black, brown, or yellow, top Dem politicians, in particular, live together, send their kids to the same schools, etc. That is part of why we know that the class warfare is a facade, a means to an end, because when they go home, and the proles aren't watching, the leaders of the different factions being played off against each other are essentially virtually indistinguishable in the parties they attend, the places they vacation, their schools, houses, etc.

"There's such a thing as opportunity cost, about which Krugman and his fellow looters apparently know nothing."

AOC maybe. But Krugman has to understand opportunity costs. But their personal gain is more important to him and those like him.

Hey Skipper said...

Bruce, well said.

The only quibble I have is that for progressives, a la AOC, as opposed to institutional Dems, class warfare is their sine qua non.

Timotheus said...

It seems that for any economic policy, you can find arguments both for and against said policy ... all penned by Paul Krugman. The side he chooses simply depends on the political flavor of the day.

Bruce Hayden said...
This comment has been removed by the author.
Bruce Hayden said...

"The only quibble I have is that for progressives, a la AOC, as opposed to institutional Dems, class warfare is their sine qua non."

I think I have to agree. At some point though, they all grow up and sell out. There are some, like I think the Clintons, who never really believed in class warfare, and we're always in it for the money. But some may have been corrupted over to the dark side. I think that may include Bernie Sanders and Joe Biden.

What got me thinking about this was that after writing my diatribe I was browsing around, and ran into a Mark Styne article that demographicly, China is probably in a death spiral, after two generations of their one child policy, they have dropped to less than half of a replacement level birth rate. Replacement level is when every woman has one daughter survive to reproduce. Not sons, but daughters, who in China for those two decades were routinely aborted or murdered at birth. They are currently apparently around 0.4. Their average age is shooting up, likely passing ours in the next decade or two, with the Indians and Muslims around them lagging further and further behind. Which was interesting in itself, but tying in here, one of the commenters suggested that joining the CCP and rising to leadership required a certain level of corruption. Someone starting up through the ranks would be given a little power and then watched closely by those around him (we can safely use the male pronoun here since it almost always is a "he" in Chinese society). If he skims a little on the side, he is trusted a bit, and given a bit more power and responsibility. Again, if he skims a bit more, he is trusted and cleared for advancement. All the way to the top. Increasing corruption through the ranks is a job requirement for CCP membership, and, thus, wielding power in China. And that is because the corrupt don't trust the honest, for good reason. And that got me thinking about politicians back here in the US, and, in particular, Dem politicians in DC. (Republicans aren't immune, but not nearly as many make a career out of their "public" service). I don't think that the uncorrupted class warriors are ever trusted with real power, and probably are relegated to the hinterlands by their own equivalent of the CCP because they might get just be honest. My prediction with AOC is that she is fairly honest right now about her class warfare and socialism, but will sell out in fairly short order, having grown up around power and money. We shall see.

«Oldest ‹Older   201 – 280 of 280   Newer› Newest»