graph from treehugger
Last week, I wrote that excessively paid CEO’s are bad for the economy. Now we have more evidence that an extremely top-heavy economy hurts us all. Five percent of the people represent 30 percent of our consumer spending.
Top-of-the-fold NY Times front page story reports the rich spent more and faster last year than the rest of us, but they are slowing down now.
So is it logical that the rich should have lower taxes, more subsidies, and anything else they want so their spending buoys the economy? The answer is no, for four reasons known to all economists.
One: Taxing the rich and using revenue to build bridges, schools, and extend unemployment benefits will make the economy grow faster. The rich spend a fraction of what they make, the middle class spends a larger share, and the poor and working class spend all their income. A dollar in the pocket of the unemployed, a nurse, construction worker, or teacher, has more velocity than in the pocket of one of Bill Gates’ children. In a recession, the smart policy move, in addition to more government deficit spending, is to target those with the highest likelihood of spending.
Two: Taxing the rich does not hurt them. Pause here and think what people want with their money. Necessary gadgets, cars, and basic houses? No, the rich aren’t in pursuit of necessity, but luxury. They want the “best” gadgets, cars, and showiest house. Tax them more and they will still be the cock of the walk. Taxing does not hurt their well-being. The newly taxed among the rich will merely settle with cheaper luxury spending, which is still unaffordable to most of us.
Cornell economist Robert Frank’s book, Luxury Fever, makes this point in the parable of the watch. $75,000 watches exist to sell the $20,000 watch, because rich people buying the $20,000 watch think they are being reasonable. So we can put a very high tax on the $20,000 watch, and they can then buy the $5,000 watch that still puts our $20 watch to shame. The rich get psychic well-being by having the most expensive watch, no matter how much it costs. CEO’s get exorbitant pay not to buy goods, but to keep score against other CEO’s.
Three: If a small group of privileged people dominate the market, productive resources are skewed towards their tastes. Economist Tibor Scitovsky showed that a lopsided distribution of spending power produces a lopsided bias in what is sold and produced. When the rich have so much market power, they alter the social production curve in their favor. Excessive wealth among a very few diverts raw materials, labor, and capital away from more socially useful goods and services. More private golf courses, fewer public parks. More limousines and private jets, fewer high speed trains and efficient airports. More expensive private colleges, weaker and more crowded public universities and community colleges.
Four: But won’t high tax rates cause the rich to stop working and investing? Not enough to make any real difference. This nation’s economic growth was at its highest when marginal income tax rates were also at their peaks. Taxing the wealthy did not reduce their relative position. (Remember, we are only talking about income taxes here. The rich also do not pay their fair share of taxes on property, sales, and capital.)
Not having an explicit economic policy dedicated to focus on reducing inequality makes the downturn worse than it needs to be, slowing the recovery. Favoring the rich also starves the country from investing in the common goods we all need—a cleaner environment, better public infrastructure, secure retirements, and adequately funded public education.
34 Responses to Obscene Economics: Part 2
marcbousquet - July 18, 2010 at 2:20 pm
Ah, the only point at which to disagree in this fine post, Teresa, is the notion that these truths are “known to all economists.” If only!
jbelluomini - July 18, 2010 at 4:00 pm
I read a rebuttal comment from someone posting as livefreeordie2 and while I will not participate in labeling, the fact is that the rich pay most of the taxes as is and, if the reports are accurate, fully 47% of the citizenry pays no taxes at all. I’ve also read that if we took all of the wealth possessed by the rich, we would not reduce the bucket of national debt by more than a drop. On the face of it, taxing the rich is a limited source of funding. This imbalance in taxation provides the inherently unfair outcome that about half of the work force is s a source of tax revenue and expected to support the other half.While sounding compassionate, social programs have enslaved the generations since FDR by lashing them to the public dole. Over time that has robbed them of personal initiative and created the mentality that the central government should rightfully provide for them. There is no more striking example of how state social programs kill personal productivity and initiative than the failed collective experiment of the Soviet Union. We can see the economic impact of such programs in Greece and Spain and European economies have realized that spending to support such programs is unsustainable. These economies are trying to right their ship, much to the chagrin of the populace, buy contracting social programs. Global wealth is finite and, at that, is built on the substance of printed currency, which has only as much value as is attributed to it on the basis of confidence. Printing more money has the net effect of penalizing the poor through inflation. So printing more money is not a good option.I am a staunch supporter of government support for those that legitimately cannot support themselves. That is the proper action of a civilized, compassionate nation. I am totally against the notion that everyone has the right to some utopian existence at the behest of the federal government. Such programs are economically impossible to sustain. To paraphrase a quote attributed to Margaret Thatcher, “The only problem with socialism is that sooner or later you run out of people to take money away from.” We could better serve our countrymen by demanding self reliance and personal responsibility of those that are able and putting the others, in as much as their ability allows, on that path.
macheath - July 18, 2010 at 5:37 pm
jbelluomini says:”…the fact is that the rich pay most of the taxes as is and, if the reports are accurate, fully 47% of the citizenry pays no taxes at all.”Sorry, not accurate. There are lots of taxes, not just federal income taxes. There are sales, property, payroll, etc. And when you take into account ALL taxes, the top one percent pays 22.1 percent of all taxes. And they have 20.4 percent of all income. Pretty proportional. The top one percent pay 22.3 percent of federal taxes, by the way.Even the lowest income people–the bottom 20 percent whose average cash income in 2009 was $12,400–pay 1.9 percent of total taxes, and around 16 percent of their income in taxes. It is simply a right-wing myth that many poor people don’t pay “taxes.” Some don’t pay federal income taxes, that’s true. But they pay taxes. And it is another myth that the rich are unfairly burdened when you consider total taxes and their relationship to total income.Let’s please check the facts before all of these noble speeches quoting Margaret Thatcher and calling for the poor to be self-reliant, blah blah blah. The rich are doing just fine in America, and could (and should) pay more in taxes than they do. But they are not unfairly burdened.
livefreeordie2 - July 18, 2010 at 10:51 pm
macheath – No. You are wrong. Go to the IRS web site – http://www.irs.gov/taxstats/indtaxstats/article/0,,id=129270,00.html Scroll down the page to “Returns with Positive Adjusted Gross Income (AGI). You’ll find that the numbers I mentioned were a bit out of date – the top 1 percent of wage earners in 2007 paid 40.42% of all income taxes. The top 0.1 percent – the wealthiest of wealthy Americans – paid 20.19 percent of all income taxes. If you would like to dispute the IRS when it comes to tax matters, I’m sure we would all appreciate the source of your information.Some additional facts. The Bush tax cuts were passed in 2001 and 2003. In 2001, the top 0.1% of wage earners paid 16.06 percent of all income taxes – at 20.19, their share has increased by 25%. That’s right. Tax cuts for the wealthy? They are paying a lot more now. And the top 1%? They were at 33.89% and have increased nearly 20%. That’s right. The rich are paying far more now, as a percentage, than they were before the Bush tax cuts. The top 10%? Hmmm. . . increased only by 9%. And it keeps getting smaller until you hit the bottom 50% and they are paying nearly 30 percent less now than in 2001. Their share has decreased from 3.97% to 2.89% of all income taxes. Again, I ask you. If the Bush tax cuts were for the rich, why is it that they are paying substantially more and the poor and many in the middle class are paying less? Like I said to macheath – go to the IRS web site and look for yourself. A very few Americans are supporting tens of millions already. So, having dealt with that, let’s look at what Ghilarducci advocates. Let’s start with the fact that she would have the government confiscate everyone’s 401K or 403B and convert it to a Guaranteed Retirement Account to which everyone would contribute 5% of their income mandatorily. Does that sound like Social Security? Of course, but you would be paying for social security, medicare, etc. anyway. Why? Because the current system isn’t fair. Why? Because if you prepare yourself and/or work harder than others and therefore make more money and consequently save more money, IT ISN’T FAIR! In the above entry, she suggests things like this: “The rich also do not pay their fair share of taxes on property, sales, and capital.” What? Let me get this straight, Ghilarducci is proposing that there be some sort of progressive scale for property and sales tax based on how much you earn? Can you imagine having to carry a current pay stub with you to determine how much sales tax you have to pay when you go to a department store? And although she’s in her early 50s, apparently Ghilarducci’s memory of economic policy doesn’t go back to the 1993 when Congress repealed the 10% luxury tax on yachts over a million dollars. Why did they repeal it? Because rather than pay the money, the rich went elsewhere to buy their yachts. A lot of Americans lost jobs or went out of business because of the kind of soak-the-rich logic that is employed above. “Taxing the rich does not hurt them.” Of course not! It hurts everybody else! Who do you think provides the jobs in this country? When was the last time anyone reading this got a job from a “poor person?” Finally, it’s about time people wake up and realize that Keynesian Theory doesn’t work. Kahn’s multiplier theory doesn’t work. The money that’s being taken out of the economy to be spent by government is money that could be otherwise spent in the free market – creating jobs and wealth. Jbelluomini is incorrect when he says that global wealth is finite, however, at any given time, there is only so much money available to be borrowed and if the government is borrowing all of it, private enterprise is choked out. And with the uncertainty created by Obama and the Democrat Congress, private enterprise will sit on its available capital. What Ghilarducci proposes above is nothing short of economic suicide – but as I’ve said before, that’s what she and her ilk are hoping for so they can create a Union of Soviet Socialist United States. Hey! We’ll all be living in hovels (except for our beloved leaders), but we’ll all be EQUAL!Swell.
trendisnotdestiny - July 19, 2010 at 8:42 am
#2What do you know about economic sustainability?Oh you mean it is hard to maintain the New Deal Programs when:1) Our country is taking on two expensive wars (& planning a 3rd)2) Our defense budget skyrockets that of our next 10 competitors3) We have taken on a decade of tax cuts that we cannot pay for4) Our industries’ leaders have pushed for so de-regulation and privately led regulation that our economy is experiencing phenomena not seen since the 1930′s5) BP, ENRON, GOLDMAN SACHS (people profiting from others misery)6) Offshore Banking Accounts & Corporate Welfare(the wealthy have one foot in this economy when it is profitable and one foot out avoiding taxation…. (all the while selling the idea that entitlements lead to laziness and unproductivity)Self reliance and personal responsibility is code in the world of dominant white male privileged capitalism. Words like responsibility and reliance only work both ways. Those who have the most responsibility to our society have been more interested in themselves than others. When someone point this out to a group of learned people a number of processes result. These processes are designed to minimize, rationalize, deflect and claim competing forms of victimization (Wise, 2008)- Speaking Treason Fluently
trendisnotdestiny - July 19, 2010 at 8:54 am
#4 livefreeordie2,Keynesian model of economics worked fine (1943-1974). Oh yeah, the Golden period of economic? Free market economics (Friedman) has served us so well, livefreeordie2, in the past thirty years:1) Dictatorships in the Latin America (no democratically elected)2) 1980 US biggest creditor in world – 5yrs later (biggest debtor)3) S&L Crisis4) Repeal of Glass Steagall & Usury laws5) Corportate Corruption (Pharma, Media, Energy, Finance)6) Accounting Fraud7) Rating Agency Fraud8) Internet and Technology Bubble9) BP Gulf disaster, Bhopal, Exxon Valdez10) Massive state and local government indebtedness11) Wall Steet Bailouts, Madoff Ponzi schemes, Goldman Sachsmacheath is correct…. I have over seventy charts that I could show you livefree, that could support his point… Your one website about IRS filings is lame (we know that regulatory funding has been obliterated over the past two decades in that agency)… Challenge yourself to find information that doesn’t already fit into your preconceived notions
macheath - July 19, 2010 at 9:20 am
livefree says to me:”macheath – No. You are wrong. Go to the IRS web site” and then he cites data ONLY ON FEDERAL INCOME TAXES, NOT ON THE TOTAL TAX BURDEN, which was my point.Sorry for yelling, but this is typical right-wing cherry picking of data to misrepresent a point. It is like cheesy high school debating, not real policy discussion. If you want to say that the rich pay a high amount of the AGI on federal income tax ALONE and that bothers you, go ahead. (Although they pay those taxes in rough proportion to the amount of total national income they have, so I don’t see the problem.)But if you want to say that the rich pay ALL the taxes, and poor people don’t pay taxes, you are simply, utterly wrong. Here’s one of many source that will show you the total tax burden paid by all Americans of all income groups. For those of you genuinely puzzled about this argument, the attached site will directly refute these false claims that the right wingers circulate through their networks. http://www.ctj.org/pdf/taxday2010.pdf
rightwingprofessor - July 19, 2010 at 10:03 am
macheath,You should not count social security as a tax, it is supposed to fund one’s retirement. While we all know this is a charade, and they money is being spent as soon as it arrives, it is still different from other taxes. If we take social security out of the equation then livefreeordie’s analysis is a lot closer to accurate than your analysis. Yes even the poor pay rent, and some of that rent goes to property tax. And even the poor pay sales tax. But the reality is that most of us are being heavily subsidized by the rich. The federal government spends for then $10,000/year per citizen. Does your family pay $10,000/year per person in federal taxes? If not, you are being subsidized.
livefreeordie2 - July 19, 2010 at 10:42 am
Rightwingprofessor – You are correct. Social Security is for one’s retirement and we all know it’s kept in Al Gore’s lockbox, so it can’t be counted. And Medicare is not a tax, simply a payment on the Medical insurance one will receive at the age of 65. macheath – No one, least of all me, has said that the poor don’t pay taxes. Let’s face it, the majority of smokers are on the poorer side and they pay a ton in tobacco taxes (including some from Obama – the first violation of the “no taxes for families under $250K). They pay sales tax on the things they buy and I don’t see how that’s unfair. The more expensive the item, the higher the tax – it would seem to work out perfectly for you! Hey! And now poor people who want to maintain their tan will be paying an extra tax – another gift to them from Obama. And btw, Citizens for Tax Justice? What a scam! Whenever I hear a lefty using the word “justice,” I reach for my wallet. Justice indeed. Tax justice, social justice. . . perversions of the word. The alternate word is “fairness.” Whenever a lefty says he or she is for “tax fairness,” I know they mean they want me to pick up an even bigger part of the tab.
performance_expert2 - July 19, 2010 at 11:10 am
Thank you for the article and advocacy of remedy. FYI, today the Washington Post debues their exposé on “top secret America.” Various security agencies have been distributing a directive letter to their employees and vendors telling them to observe the rules of their contract and to not talk to the Washington Post. http://projects.washingtonpost.com/top-secret-america/ “the size, lack of transparency, and the cost.”
performance_expert2 - July 19, 2010 at 11:26 am
“Outside a gated subdivision of mansions in McLean, a line of cars idles every weekday morning as a new day in Top Secret America gets underway. The drivers wait patiently to turn left, then crawl up a hill and around a bend to a destination that is not on any public map and not announced by any street sign.Liberty Crossing tries hard to hide from view. But in the winter, leafless trees can’t conceal a mountain of cement and windows the size of five Wal-Mart stores stacked on top of one another rising behind a grassy berm. One step too close without the right badge, and men in black jump out of nowhere, guns at the ready.”_________________________I read a comment on a web discussion musing that the United States of America doesn’t exist any more, just no one has yet informed the people. In an odd way, this comment resonated. With most of Congress bought off with corporate lobbying money, it seems that the only time anyone has tried to do any effective policy for the people is when the governor’s work together as a team. They have their own organization and it is they who have to face the conditions in their states.
performance_expert2 - July 19, 2010 at 11:40 am
“Much of the information about this mission is classified. That is the reason it is so difficult to gauge the success and identify the problems of Top Secret America, including whether money is being spent wisely. The U.S. intelligence budget is vast, publicly announced last year as $75 billion, 2-1/2 times the size it was on Sept. 10, 2001. But the figure doesn’t include many military activities or domestic counterterrorism programs.”"… But improvements have been overtaken by volume at the ODNI, as the increased flow of intelligence data overwhelms the system’s ability to analyze and use it. Every day, collection systems at the National Security Agency intercept and store 1.7 billion e-mails, phone calls and other types of communications. The NSA sorts a fraction of those into 70 separate databases. The same problem bedevils every other intelligence agency, none of which have enough analysts and translators for all this work.”http://projects.washingtonpost.com/top-secret-america/articles/a-hidden-world-growing-beyond-control/print/
dank48 - July 19, 2010 at 11:52 am
We’re really arguing about what colors would be best to use when we repaint the deckchairs on the Titanic. The executive, legislative, and judiciary have been gangraping the Constitution for the past thirty or forty years, we live in a de facto police state, the U.S. treasury has been looted for decades into the future, and we have the best government money can buy. Globalism has some very interesting aspects indeed, including its effects on such old-fashioned notions as patriotism and nationalism. In Gravity’s Rainbow, Pynchon pointed out that the halfway-there tracking/guiding station for the V-2 rocket bombs was atop the Royal Dutch Shell building in Amsterdam. It didn’t matter which way the war went; Shell would be on the winning side either way. A taste of things to come.
bdbailey - July 20, 2010 at 12:32 pm
livefreeordie2I have to dispute your causal attribution regarding income and taxes. If the rich pay most of the taxes, it is because they make most of the money. If, after the Bush tax cuts the rich paid an even larger share of the taxes, it is because they gained an even larger share of the money. Your arguments about self reliance, and limits to the size of social programs are not without merit. However, comparing the new deal to the Soviet Union is like comparing apples to… I don’t know…swordfish. You argue against taxing the rich because it is a finite source. On the other hand, it is a finite source which is growing, as opposed to middle class wealth which is shrinking.Our increasingly vitriolic public debates about the size of government (they are not really debates, but harangues), is focused on the wrong question. Our focus and our criticism should be on the effectiveness of government, not the size. That is how we get our moneys worth, and certainly there is a lot to criticize, but we will never improve it as long as we are focused on size.Ronald Reagan once said something to the effect that government is not the solution, it is the problem, and much of the country has taken that as gospel ever since. In the end, we have elected officials to run the government who do not believe in government.
livefreeordie2 - July 20, 2010 at 2:29 pm
bdbailey – Of course they make most of the money. And they pay most of the income taxes. But I’m sick and tired of hearing people like Ghilarducci talk about the “Bush tax cuts for the rich.” The truth is that those tax cuts increased the amount revenue they pay – and shouldn’t that be the goal? Or is the goal, as I suspect of many, to just take as much from the rich as the government can get away with? The amount of wealth available is not static. This is not a zero-sum game. It is possible for the rich to get richer while everyone else does, too. I did not compare the new deal to the Soviet Union – I think you’ve misread my words. I was suggesting that the ultimate goal of socialist economics professors and their fellow travellers is to turn the US into socialist dictatorship. Admittedly, the New Deal was one of the first steps in that direction, but it certainly wasn’t what I was talking about.As for the size of government, it doesn’t take a genius to know that the larger and more unwieldy an organization is, the more difficult it is to control and the less effective it will be. That’s why in the military, for example, leadership is pushed as far down the chain of command as possible. The same this is true with effective government and that’s how the founders designed it. The federal government has certain responsibilities, the rest are left to the states and the people. That said, government is normally less than effective at every level – but if it’s your town government that has a problem, you are closer to it and can have a more direct effect. The same is true to a lesser extent at the state level. And the truth is that the government will never be as effective as private enterprise. By the way, I would suggest to you that Obama, Reid, and Pelosi not only believe in government, they probably believe in nothing else.
anonscribe - July 20, 2010 at 3:40 pm
livefreeordie2 – that you “reach for your wallet” every time you hear a liberal use the word justice shouldn’t cause much consternation. since you’re spending so much time on this comments section, my guess is you’re about as far from rich as any of us. so, the real question is why you’re so concerned to fight for the “rights” of the rich since it would clearly be in your interest to do otherwise? of course, if you’re the rare billionaire who spends his time trolling the Chronicle, please forgive me.the saddest thing is that you probably think of yourself as rich. you think the poor are stealing from you. they’re not. you don’t make enough money for the government to steal from you. the amount you pay in taxes probably just covers what you take out of the system.so, the real reason you and all the tea-partiers–who would watch their incomes decline dramatically if anyone ever listened to them–whine on and on about “socialism” and wax righteously about the rich being fine, upstanding folk who should be able to buy diamond dog collars while hard-working folks die from lack of adequate health coverage….is that it would hurt their oversized egos too much to have to admit they–like me–don’t amount to much. they never made much of themselves (compared to the captains of industry), but they think if they just defend the rich hard enough, they’ll get to be rich some day.my advice: find something better to do with your time. the rich don’t care about you, and the poor aren’t taking a dime from you. your problems are just that: your problems. deal with them without getting on your narcissistic high horse. if government is the problem, then turn your back on it. since you have so many great ideas, go start one of those lucrative businesses you praise so highly and actually contribute something to the market. when you make so much money that you’re actually rich, then feel free to bluster all you want. of course, if that day ever came, my guess is that you wouldn’t care to bluster much at all–you’d be too busy flying your private jet to little islands in indonesia.
trendisnotdestiny - July 20, 2010 at 6:04 pm
QUOTE”The truth is that those tax cuts increased the amount revenue they pay – and shouldn’t that be the goal? Or is the goal, as I suspect of many, to just take as much from the rich as the government can get away with? The amount of wealth available is not static. This is not a zero-sum game. It is possible for the rich to get richer while everyone else does, too.”livefreeordie2,Quite correct that money flows in and out of global markets dynamically benefitting from the trade of scarce and abundant resources. However, the notion that we all can get rich (American Dream) with free market principles is one of the biggest fallacies perpetrated within economic departments, western and popular culture. The reason our US stock market performed as it did during the 80′s and 90′s is due to three factors that are not present currently in your assumption of why can’t we get rich too thesis.1) Easy and Cheap Access to Credit (leading to an indebeted populace) ******* This was a result of de-regulation, privatization, Huge Multi-national profits from overseas markets and significant changes to our country’s mission in the world (Financialization over Manufacturing)2) Many Middle Class families and Baby Boomer segments of society either had combined incomes or significant access to purchasing real estate, financial assets and luxury/technological gadgets… This meant many companies in our economy were flush with cash, driving up stock markets and expanding research/development….3) Relatively Stronger Dollar(our currency wasn’t debauched) I spent over a decade in the brokerage industry during one of world’s most profitable markets run ever (1991-2000) When I started the Dow Jones was at 2574 and when I left it was close to 11000 (a decade long rate of return close to 34%)…. This was not real nor sustainable, but reflected a lot of people belief and reliance on consuming cheap credit… provided that nothing bad were too happen…. It is important to point out that your comments are not wrong, but still reflect a time that has long passed… Getting rich for most people in this economy will take an extraordinary amount of risk and sufficient capital up front!I suspect that the reason Dr. Ghilarducci triggers you is that she reminds us all that the next 20 years will be nothing like the last 20 years… which means that we need to acknowledge the need for a turn from an individually based meritocracy to a more collective and conscious form of an egalitarian capitalism…. The goal should be first to acknowledge and push for an understanding of where are now, where we have been before spewing the same rhetoric that got us here. It should be noted that nowhere has it been mentioned that we should all become communists. If our country is a pendulum, modifying capitalism requires balancing collective and individuated action as we have drifted from our own capabilities and sustainabilities…Peace
livefreeordie2 - July 21, 2010 at 12:36 am
anonscribe – I pretty much feel sorry for you. . for many reasons. First and foremost is that you screwed up and capitalized Chronicle in your first paragraph. Nearly a perfectly lower case document run off the rails by a capital C. I believe in the rights of all Americans to be secure in their lives and property. I begrudge no person anything and wish principally to be left alone by the governmnet. I have made sacrifices for my country and continue to pay more than my fair share in taxes. I am extremely rich in that I have wonderful friends and family, I work for a fairly dynamic institution of higher education, I have a staff of extremely capable folks who I consider to be my friends, and I have had a wonderful life. I’m not wealthy by any stretch and I’m not envious of those who have means beyond mine. And though I’ve never been a captain of industry, I have, in two distinctly different careers, amounted to far more than my 5th grade teacher would have ever predicted. But I’m at a loss. . . why won’t you amount to much? Because you are apparently so angry? Because you haven’t learned proper punctuation? Do you simply consider yourself a loser? Of course based upon your comment, I guess I can understand why you have reached that conclusion. But having said that you don’t amount to much, why on Earth would you then be trying to give me or anyone else advice? Wouldn’t it take a rather oversized ego for someone who doesn’t amount to much to give advice to anyone else? And why are you so concerned about how I spend my time? Has it ever occurred to you that if you spent less time worrying about what others are doing and spent more time worrying about what you are doing, that in the end, you might amount to more than you imagined?By the way, there are no hard-working people dying from a lack of adequate health coverage, though that may change if Obamacare is not repealed. The elderly have Medicare. The poor have Medicaid. It is against the law for a hospital to even ask about money or insurance when someone shows up to the emergency room. Don’t know where you got your info, but you’re wrong. Anyway, to answer your question about why I’m so concerned to fight for the rights of the rich. . .why I defend the rich. . .it’s certainly not because I think I’ll ever be wealthy. It’s because they are fellow citizens of this country who deserve to be treated with the same fairness and respect as any other citizen. Unlike you, apparently, I don’t do things or say things simply because it would be in my best interests. I do things and say things because I believe them to be right.
macheath - July 21, 2010 at 12:06 pm
Come on everybody. We’re just talking about marginal tax rates on personal income. A progressive income tax, and the relative marginal rates, don’t violate anybody’s “rights.” What hot air.
trendisnotdestiny - July 21, 2010 at 12:17 pm
Livefreeordie2,QUOTE”I do things and say things because I believe them to be right.”That is because no one has challenged you to consider that right changes moment to moment in this culture (its blurred and not absolutist)… most operate from the position you refer, the difference is that you seek only that information that confirms your world view… QUOTE”By the way, there are no hard-working people dying from a lack of adequate health coverage”There are movies, books, dissertations, thousands of journal articles addressing this topic, but you, livefree, seem to have come up with a profound new finding… please enlighten us and provide evidence of your research here (or is this too more of your personal beliefs that we can ignore)….
anonscribe - July 21, 2010 at 12:59 pm
livefrieg_or_roy2 – that makes three people who think not capitalizing internet comment posts is savagery. i’m perplexed. was this a job letter? do the periods not tell you where the thoughts end? anyway, since you brought it up, you made about nine grammatical errors in your post. you used “who” when it should have been “whom,” omitted a comma after an introductory phrase, included an inappropriate comma before a subordinating conjunction, forgot one before a coordinating conjunction, and threw a few in for kicks when they weren’t needed. i know that you don’t know what any of those words mean, but it doesn’t matter. you’d be too stubborn to learn anyway. those who live in glass houses shouldn’t throw stones.i love that trendisnotdestiny – a former broker – is enlightening you about the proper role of government in a modern information economy.”I do things and say things because I believe them to be right.” – So do five year-olds. It doesn’t mean much when you refuse to actively challenge your own beliefs and test them against available evidence.In closing, I hope you live a long, happy life. I just hope no one listens to you.
livefreeordie2 - July 21, 2010 at 3:10 pm
macheath – Behavior of individuals is dynamic, not static, especially with regard to paying taxes. When JFK reduced marginal tax rates in 1961 from more than 90% to 70%, tax revenues increased dramatically. The same result was experienced when Ragan cut the top marginal rate from 70% to 35%. Like it or not, the wealthy invest their money and that ends up providing jobs. Increase the tax rates and it will likely drive changes in behavior resulting in reduced tax revenue. With the economy quite fragile, the result will likely hurt “the little guy” who is out of work much more than the wealthy.trendisnotdestiny – Thanks. I really appreciate your input.anonoscribe – I was not throwing stones at you! You were the one who said you didn’t amount to much and I was just trying to help you figure out why. Sorry if it didn’t work out. Perhaps if you actively challenge your own beliefs and test them against available evidence, you might amount to something. Or not.
stinkcat - July 21, 2010 at 5:17 pm
“Increase the tax rates and it will likely drive changes in behavior resulting in reduced tax revenue. “This of course depends on what side of the Laffer curve we are on. If we are still on the wrong side of the Laffer curve both George Bush and the democrats in congress ought to be embarrased. Because by cutting taxes they could have both had more of what they both want. Lower tax rates and more money to spend.
macheath - July 21, 2010 at 11:30 pm
Sigh. A theologian friend once told me error is infinite, and you can’t spend all your time correcting it. But here goes:Livefree says:”When JFK reduced marginal tax rates in 1961 from more than 90% to 70%, tax revenues increased dramatically. The same result was experienced when Ragan cut the top marginal rate from 70% to 35%.”Revenues grew under Reagan, but when you adjust them for population growth and inflation, they grew more slowly than at other times. Here are three periods, with real per capita revenue growth (that is, adjusted for inflation and population growth):1972-1980 24 percent growth1980-1988 19 percent growth (this is the Reagan period)1992-2000 41 percent growth (under Clinton, with higher tax rates)Again, using the unadjusted data from the Reagan years, and not comparing them to other periods, is cheap cherry picking of the data. Real revenues per capita grew less under Reagan, because there were deep tax cuts. They grew much, much faster (more than doubled) under Clinton, with higher tax rates on the wealthy. There is no credible evidence or analysis that tax cuts under Reagan caused revenues to grow more rapidly. On a real, per person basis, they grew much more slowly. Here endith the lesson.
livefreeordie2 - July 22, 2010 at 1:08 am
macheath – Nice try. The truth is, however, that Reagan’s cuts took the top marginal rate from 70% to 35%. Clinton raised the rate, to be sure, but it was only to 39%. We are still talking about a 44% decrease from the original 70% rate that Reagan inherited. With so large a decrease having occured so recently, the small increase imposed by Clinton was not significant enough to alter behavior.The other thing you need to keep in mind is that Clinton had a Republican congress during 6 of those 8 years. As we’ve seen since 2007, a Dem congress can ruin the economy in very short order. Oh. . .and please provide a source for your figures.
trendisnotdestiny - July 22, 2010 at 11:01 am
livefreeordie2,You have had a hell of week. Here are a grouping of selected quotes from your written work at CHE on just 2 threadsQUOTES – Ghilarducci 1) “Finally, it’s about time people wake up and realize that Keynesian Theory doesn’t work.” 2)”The rich are paying far more now, as a percentage, than they were before the Bush tax cuts.”3)”Taxing the rich does not hurt them.” Of course not! It hurts everybody else!”4)”What Ghilarducci proposes above is nothing short of economic suicide – but as I’ve said before, that’s what she and her ilk are hoping for so they can create a Union of Soviet Socialist United States.”5)”Let’s face it, the majority of smokers are on the poorer side and they pay a ton in tobacco taxes”6)”Whenever I hear a lefty using the word “justice,” I reach for my wallet.” 7) “It is possible for the rich to get richer while everyone else does, too.” 8) “I was suggesting that the ultimate goal of socialist economics professors and their fellow travellers is to turn the US into socialist dictatorship.”9) “And the truth is that the government will never be as effective as private enterprise.”10) “By the way, there are no hard-working people dying from a lack of adequate health coverage”11)”A Dem congress can ruin the economy in very short order.” ————————————————————FROM DR. JACKSON’S R-WORD ARTICLE12) “For a person to be a racist, he/she must believe that his/her race is superior.”13)”Unfortunately, for political reasons (or reasons of personal gain), the left and some in the African American community apply the label to things people do for public policy reasons.”14) “Racism is serious stuff.”15) “Now, forget about the right or wrong of either side of the issue.”16) “Racism is not endemic in America.” 17) “There is less and less of it every day and the less common it is, the more serious each charge becomes.”18) “My, my. . . it is a busy day for news about racism” 19) “The even greater problem than falsely accusing someone is that eventually, with enough false accusations, the word will indeed lose its meaning – and its impact.”20) “Sorry. . . you’re wrong. You can dig into all the statistics you want and it doesn’t really amount to much more than discussing how many angels can dance on the head of a pin.”21) “By trying to convince everyone that racism is everywhere and that, even if we don’t realize it, we’re ALL racists, all you (trendisnotdestiny) do is feed divisiveness and perpetuate a victim mentality.”22) “I must apologize for apparently getting the Sherrod story wrong. Rather than being a story about racist attitudes, it is, again apparently, a story about change – a story about overcoming feelings based on race. I got suckered in by the video and the fact that by the time I read the story, she had already been fired by the White House and the NAACP had denounced her. Based on that, I did exactly what I’ve been complaining about – labeled this woman a racist unfairly. I was wrong about Sherrod (unless the story changes again tomorrow. . .) The entire story still raises questions, but she is clearly not a racist.”livefreeordie2, peace be with you sir…. it was a long week and a lot of misplaced information…
trendisnotdestiny - July 22, 2010 at 1:36 pm
Why are there so many handles with “or die” at the end? Anyway, I thougth a moment of levity might help, here is a link to a Will Ferrell PSA…. http://www.funnyordie.com/videos/041b5acaf5/protect-insurance-companies-psa
livefreeordie2 - July 22, 2010 at 2:16 pm
trendisnotdestiny – Thanks. I appreciate your input.
isambard - July 26, 2010 at 10:49 am
I assume that livefreeordie2 only does it annoy, like the baby in Alice in Wonderland; there’s no point arguing with such nonsense, since he plainly doesn’t believe a word of it in the first place. But one small thing to notice is that the US would solve all its deficit problems and a lot else if it borrowed either the French, Swiss, or German healthcare systems; the British NHS is much-loved by the natives, and in the eyes of economists constitutes the best value for money in the world, but a prosperous country could afford to emulate the French, who have what healthcare analysts reckon to be the best system full stop. (It’d also improve job mobility, as well as life expectancy, the health of children, and – eventually because it’d reduce their anxiety levels – the psychological wellbeing of all those angry Tea Partiers.) It won’t happen because too many profit in the short-term from wrecking the country’s long-term prospects, and too many others are, sadly, being had for mugs. The disconnect between the technological and scientific intelligence of the country and an ideological mindset that hasn’t moved on from Shays’ Rebellion is very odd.
livefreeordie2 - July 26, 2010 at 5:41 pm
isambard #29 – I do it because there are people like you – people who are willing to trade their freedom and liberty for the crumbs of security represented by things like “free” health care and unending unemployment benefits. You may happily trade your freedom for the slavery of socialism, but you aren’t going to include me without a fight.Headline – National Health Service DecentralizationEven better: Headline – Axe falls on NHS services. “Some of the most common operations – including hip replacements and cataract surgery – will be rationed as part of attempts to save billions of pounds, despite government promises that front-line services would be protected.” Check the British media, don’t believe me. That last bit comes from the Telegraph on line. Anyone who believes that if the government takes over health care they will still receive care with the same speed, and of the same quality, is a complete and utter fool. You, isambard, are living in a dream world. You are being lured off of a cliff by the promise of security you don’t deserve and haven’t earned – and all you will do is fall into slavery.
trendisnotdestiny - July 27, 2010 at 12:15 pm
livefreeordie2,Ater the week you had recently, you want to come back troll more?You are so brazenly uninformed and simultaneously righteous that it might just be easier for you too just spewed a couple large messages of blather (and I’ll do the rest see #26)…My suggestion to you is read more and blog less!
livefreeordie2 - July 27, 2010 at 1:37 pm
trendisnotdestiny – Thanks. I appreciate your input.
isambard - July 27, 2010 at 4:47 pm
Anyone who believes that most countries in Europe are any less free than the United States is in need of psychiatric help. As to the NHS, anyone who has no insurance in the US would certainly get better help and get it quicker than in the US, and most people who have insurance in the US would get better care under the NHS. The NHS does less good hi-tech care than the best US hospitals, and provides very much better everyday medical care. But it’s less good overall than the French system, which is why it is mysterious to me that the only comparison that ideologically fired-up Americans make are with the NHS and Canada. These comparisons aren’t matters of ideological attachment, but matters of fact, and the merits of the French system explain why there are moves afoot to decentralize the NHS.
livefreeordie2 - July 28, 2010 at 11:39 am
isambard #33 – I’m assuming you mean that “in the UK would certainly”. . . And you are wrong. Again. It is illegal for a hospital to ask for insurance or payment of any kind when someone walks into an emergency department. I’m the only one in my immediate family in higher ed. . .everyone else is in healthcare. Hospitals are obligated by the government to do millions in free health care every year and they write off even more than that. Medicade will pay for 10 ED visits a year, but after that, the hospital must provide the treatment without reimbursement. The point is, anyone who seeks treatment in the US gets treatment.The French NHI has good points and bad points. Certainly, from what I’ve read, it is better than the NHS in Britain. That said, it’s been in deficit for 25 years despite the fact that taxes on employers and workers are incredibly high. Doctors are poorly paid. I’d be interested in knowing how the French compare to the US when it comes to medical breakthroughs in the last 50 years. But the point is, isambard, that most leftists don’t want the NHI, do they? They want single-payer, government controlled health care – period. And the result will be that, just as with the NHS, government hacks will be telling everyone who gets what health care. . . if and when. So, you tell me what is “more free.” 1. I use my money to pay for the type of medical insurance and get the treatment I want when I want it. 2. The government takes my money in the form of taxes to pay for universal health care and then tells me what health care I can have, when I can have it, and if I can have it at all. You tell me, smart guy. . . what represents freedom to you?