October 22, 2004

• Wow... That article reeks of an economist. My head started to hurt when he began spewing about quintiles. Of course, it could just be this crappy monitor.

  Moreover, if you break that top quintile down into finer pieces, you discover that the super-rich weren't treated much better than the near-super-rich—and certainly no better than the middle class. If you were in the top 20 percent of taxpayers, your tax cut was about 11 percent. If you were in the top 1 percent, your tax cut was still about 11 percent. And if you were in the top one-tenth of 1 percent? Then you got about a 12.7 percent cut—almost exactly the same as the median taxpayer.

  ? Cue darkened classroom. Droning voice reads: "Supply. Demand. Economics."
• Good article. I especially liked this little snippet, all the way at the end: "...if, in other words, you are a mainstream Democrat—then George W. Bush is your guy."
• I'm not going to read the article, but the basic idea is "Don't divide it up into 3 classes of people, divide it up into, really, as many groups as necessary. Make sure the percentage of people in any given group is consistent only insofar as to make my point, not an actual even distribution of population. Then, everyone got the same amount of money back!" Oh, okay, I'll read through the article. But if I get bored, I'm coming right back here.
• My own opinion is that the rich already pay too much
• Okay, I've read the article. Right, so he divvies up the quintiles by income, rather than by percentage, because while the 5th quintile can live comfortably without having to worry about where their next meal will come from, or if they'll be able to afford their hospital stay, the 4th quintile is really living paycheck to paycheck. So yeah, if you look at it that way, I see no reason, he types sarcastically, that the rich should be so abused. If, on the other hand, you see that the few individuals on the top get most of the money back from the government, you might see the real problem with the tax cuts.
• That is a pretty funny article. Thank you for the link. I tried to address his point by taking it to the logical extreme, but my post was too damn long. Suffice it to say that his argument is dependent upon future tax increases that dispropotionately favor the rich. Quite a supposition. I would add that as long as the number one determining factor of whether someone will be wealthy as an adult is how wealthy their parents were when they were born, then I have no problem with a very progressive tax system. We live in a society that rewards you for being born to wealth and makes it easier to make money if you have money. What we ask in return is that you pay back a considerable sum for being allowed to benefit from this system. As if anyone cares, my ideal tax system would be, as follows: Determine how much damn money the federal government needs every year. Then set a mark where income is tax-free until it reaches a certain point. After that, it is taxed at 49 percent. So, if that mark was set at 50,000, that would mean that no income would be taxed up to that point. People who make 100,000 would only be taxed 24.5 percent because only the second fifty thousand would be taxed. It would result in an enormous amount of people paying no taxes, probably 95 to 99 percent of people paying less than they do now, and the rest paying more. And we would always have a balanced budget.
• Dear rich, Cry me a river. Thanks, ShawnJ
• I think that it is matter of how one defines "fair". The basic debate within tax itself is the debate about whether everyone should pay the same flat rate, the same flat proportion, or a system which suposes that those with more are all the more able to part with a higher proportion, in reflection of the fact that they have a higher proportion of their income that is disposable. Do the rich pay "more"? In an absolute sense, yes, by a great deal (of course), and in the proportion of their income, yes, though not that much higher a proportion. Of course, that is the official rate only - after deductions and legal ways of accounting that allow for less tax, I don't know whether the rich really pay a higher proportion of their income than many middle class.(1) But I do wonder what that proportion would be like if one compared only disposable income, that is, income after food, shelter, clothes, school books, and other necessities,(2) are paid for? What if one family can afford to save $5000 at the end of the year, versus the family who can put away $50,000? Is it "fair"? Here there will simply never be agreement, because it depends on such fundamental beliefs about economic morality. The reasons one might argue that it it is not fair are quite clear - that some citizens should not be expected to pay more because they can, that they do not receive more services in exchange for those taxes, that one's right to ones own property and product of one's labour is inalienable. However, one might also argue that some citizens should be expected to pay more, because they can, that they do receive more services,(3) that one's right to property in not inalienable, because the planet and it's resources belongs to no one (not even humanity as a species, and very few rich people succeed solely by their own labour, but by skimming profit off the labour of others. See how I turned it all around? They are just two such different ways of understanding the world that I don't know if you could ever possibly have a consensus. Most people fall in between the extremes, of course. But "fair" is a moral judgement, and thus subject to one's own moral system. My moral system is that economic or social inequality(4) is a priori bad - it is not a logical conclusion which I have reached after rigorous thought, it is just my moral system, as influenced by my culture and personal experiences. But someone else will have a different moral feeling - that inequality is justified, perhaps within limits, or for a higher purpose. I study a society (England 1500-1800) which someone like me would be rightly denounced as a Leveller; their dominant moral code was very different, and justified inequality as the right order of the world, without which all would be chaos and suffering. So, if one believes it is "fair", one will see it as fair. If one does not believe it is "fair", one will not see it as fair. If you wanted to argue what makes the economy grow faster, or what makes the population healthier (not necessarily the same thing), then one can have an argument with facts and figures. But you cannot place morality and justice on a scale - only wrestle with it. But hey, it keeps the philosophers employed, from here to kingdom come.
• Footnotes 1.I just realised we have serious definition problems - after a recent mefi thread, I realised that many people consider to be middle class what someone else would term working or lower class - particularly in current American political rhetoric, middle class= whoever you are talking to, but not people they don't like. The article contrasts incomes at 1 million versus 60,000. 2. Necessities are also very iffy - what is a necessity? I like to fall back on Adam Smith, when he defined poverty as lacking that which the custom of the country required to be decent. Then it was shoes and a linen shirt, now it might be clean clothes everyday without patches, in many places a car, meat at the dinner table, a seperate bedroom for parents and children, probably also a tv, likely a computer (these sound like "luxuries", because 30 years ago they were, but how do children without computers at home fare at school now?). 3. Here, one must think about invisible as well as visible government services. The richer sort (good old early modern term) do have better roads, schools, more access to subsidized universities (private as well as public) - some of which is paid by local taxes, but not all - They also (usually through their position as investors in business) to contracts from the government, to trade interests protected by the government, to resources (such as forests or mineral) whose access is determined by the government. 4. Oh, god. If I tried to think about "inequality" means, I would be here until nest year, and break all the servers. I don't actually know - I've been struggling with it, and, of course, ideals are completely different from practical reality, though always important as an unattainable goal. Oh, I did it after all. Broke the comment box. Bad jb. Footnotes are meant for citations, not digressions :)
• Well, just in case we don't have enough to talk about, Bush has apparently also decided to give a tax break to corporations, and it seems he was hoping nobody would notice. This sounds like a fine way to get rid of our record-breaking projected deficit.
• dammit, Sandspider you just stole my big afternoon post. I thought that was signifigant- not so much as yet another "Bush favors the rich" story, to which we will get the usual responses: from abroad: "all Americans are stupid and love Bush- we can prove this by the fact that less than half of you voted for him last time, and less than half plan to this time" from the good ol U S of A: "oh us stupid Americans when will we learn? We all love Bush no matter how big a bastard he is and he'll surely be re-elected because we're all so stupid." I think a more relevant discussion is: how does something like this become or not become a big deal in the media? To me it is ironclad proof- Bush steals from the poor and gives to the rich. McCain of Arizona, who has been campaigning for Bush, called the measure "the worst example of the influence of special interests that I have ever seen." Here is the reuters article, but I had to dig like hell to find it. - love the fact he signed it on the plane en route to speaking in Pa. I guess my question is, avoiding easy answers like "all americans are stupid" or "that damn media," why isn't this is a huge deal in the media and the camapign, or could it become one? What factors are at work?
• You hear that? *crickets* It's the sound of the droves of wealthy citizens voting for Kerry or Nader.
• The author seems to have a shaky understanding of economics. He seems to believe that a wide gap between the rich and poor is a natural consequence of a less progressive tax system, and that this is the only fair way to do things. While the first part of that is true, he presupposes that said gap is not an economic problem in itself, or he doesn't care. Either way, that should raise some questions. I'd refute his other premises, but I think the section of the article Debaser quoted does the job quite well on its own.
• Also, rich people aren't on welfare, so they shouldn't have to pay for that! And they don't need subsidies for child care or higher education, so why should they pay for that? And they can hire their own bodyguards, so why should they pay for police and military protection? For two reasons: The first is that all social programs are essentailly investments in things that the country reaps economic benefit from. When we take money from the rich to give to some poor schlub in Pell Grants, we're saying that rich people need educated workers. When we take money from them for health care, we're saying that rich people need healthy workers. This pretend outrage over paying more (and hey, y'know, a guy with ten dollars pays more when taxed at one percent than a guy with only one dollar! That's not fair!) is totally offset when you look at the economic growth of countries in which a certain standard of social services are provided. Certainly, there are limits of diminishing returns (which may be one of the lessons of the Soviet experience), but fundementally when we invest in the American people, we all benefit from it, and the rich benefit more because they're on top. When millionaires start being taxed out of existence, lemme know. Until then, enjoy a frosty mug of shut the fuck up. Oh, and the second reason they benefit disproportionately? Because if not for the government, us po' people would be stormin' the manor homes of the rich, lootin' and burnin'. It's unlikely that without those services, the rich would be doing the same. js
• From the author's website, talking about his book,

  How should we feel about taxes that redistribute income? Ask how parents feel about children who forcibly "redistribute" other children's toys. How should we respond to those who complain that their neighbors are too wealthy? Ask how parents respond when children complain that their siblings got too much cake. By insisting that fairness can't mean one thing for children and another for adults, Landsburg shows that the instincts of the parent have profound consequences for economic justice.

  My main thought was - well, any parent who gives one child ten times as much cake as another has some parenting issues. And we were told to share our toys with any children who came over to visit. We also passed on all toys we weren't actively playing with to our cousins or to charity, along with excess clothing, since we had received toys and clothing the same way when we were in need. Another bit from the website:

  He explains why children are a good thing, and how economic theory tells us we ought to have more of them.

  I guess economic theory isn't so good at dealing with a finite earth and the problems of over-population. But I wonder what that economic theory says exactly? Because as far as I know, having too many children was a leading cause of poverty in Britain until recently, and large families still often struggle.
• If we're having a conversation about taxes and who should pay them, we should also be putting US income distribution into context.
• Funny they should mention Bill Gates in that link, as he's a Democrat. This isn't all that difficult. Bush's tax cuts cut all brackets, almost equally, and eliminated one altogether. Why shouldn't he have done this? Well, if the government cuts the lowest tax brackets, the most affluent in society are still better off. The reason? They have to pay less on the income that falls into the lowest bracket. Except with Bush's cuts, the wealthiest Americans get to enjoy a reduction in every bracket because they make enough to fall into all of them, while the Average Joe only gets to enjoy the cuts in the brackets for which he qualifies (i.e., not many, by comparison). Because Bush cut taxes at a relatively flat rate across all brackets, the rich clean up.
• Sorry, drjimmy11. I'll try not to do it again.
• ...another hit-and-run post by F8x? In other news, poll finds Bush supporters to have trouble grasping reality.
• Mr. Landsburg is not an economist, but he is a magician. All of his sleight-of-hand with 'facts' and figures reveal him to be as deft as Houdini when he's lying/misrepresenting the truth.
• Good post Daniel.
• Funny. Daniel describes half the republicans, then coppermac describes the other half. Did you guys do that on purpose? Good post Smo. That's a little fact that Mr. Landsburg conveniently left out. Did anyone see the previous article linked to at the bottom, about why you shouldn't vote? When did slate turn into such a rag? I guess I was always just reading the good articles people link to, and missing all the crap.
• I do not know this Landsburg, but based on this and Don't Vote column, he is either a fearless satirist or a dangerous psychotic and menace to the public good. If we were in a leaky rowboat out at sea, he would be suggesting that it was unfair for the strongest to do the most bailing and the children and elderly should take equal shifts...and besides, bailing is entirely pointless with all this water around us that's just going to wash back in.
• Great post, Daniel. I have no problems with Republicans who know the facts and where the candidates stand on the issues. I am terrified of the people who vote for either party based on things that are not true. And the Hussein/Osama and WMD findings are probably the two most disturbing examples of people basing their vote on things that are easily proven false to them.
• well, any parent who gives one child ten times as much cake as another has some parenting issues Word. So much with the Word. Most parents would distribute the toys far more evenly among their children than all governments today distribute the wealth among their citizens. The parent-child model is inherently socialist, even communist in some families. How could Landsburg think it a good analogy for our mostly capitalist system?
• Aren't all families communist? The wages belong to all, and each according to his need, and all that? I guess that parents would have more cash than children, and individual family members do have certain belongings (clothes, books, toys) that belong to them. Though in some families, children aren't allowed personal ownership of toys, but must share. But certainly all food, and most of the house are all common.
• In most cases, parents choose to provide for their children. Children own little except what their parents choose to give them, and a few unlucky ones get kicked out for disobeying. A communist parent-child relationship would have collective ownership of family assets (legally speaking) and better balance of power/responsibility. But now I'm talking about a communist ideal that's never existed anywhere....