Wednesday, April 19, 2006
Brad DeLong And Greg Ip On John Snow's Snow Job
An elegant takedown of Bushonomics, courtesy of Greg Ip and Brad DeLong. Here's a taste, for the link-impaired:
Mr. Snow, a former CEO of [failed railroad company] CSX Corp. who holds a doctorate in economics, said the administration intends to publicly challenge perceptions that typical workers and families haven't benefited much from the economic expansion.... Mr. Snow distributed a fact sheet that showed after-tax income per person, adjusted for inflation, rose 8.2% from January 2001, when George W. Bush took office as president, through January 2006. The sheet also showed that per-person net worth -- total assets minus debt -- rose 24%, unadjusted for inflation, from early 2001 to the end of 2005. "People have more money in their pocket" and in their bank accounts, he said.Wow! Sounds impressive! Well, except for little details like these:
Mr. Snow's case relies on averages, which can be skewed by big gains among the wealthiest.... Census Bureau data show median family income -- half of families have income greater than the median, half have less -- fell 3.6% from 2000 through 2004. Incomes for the poorest families fell even further. The only group to gain was the family at the 95th percentile -- that is, richer than 95% of all families.... Alan Krueger... [said] the real median wage rose 3% from 2000 to 2005. Gains were smallest for the lowest-paid workers and largest for the best-paid. "From the standpoint of the work force, it's been a very weak recovery," he said. Wage data don't incorporate the effects of taxes, investment income or government payments. As for net worth, a triennial Federal Reserve survey found that the net worth of the median family rose 1.5%, after inflation, from 2001 through 2004. That is far less than the 17% increase from 1995 to 1998 and the 10% increase from 1998 to 2001....Hmmmm. Median family net worth grew at double-digit rates after Bill Clinton undid the Reagan-Bush I tax cuts for the rich, and it barely budged in the years after Bush the Second put all those cuts back and then some. Remember how Newt Gingrich claimed at the time that Clinton's undoing the Reagan-Bush I tax cuts for the rich would destroy the nation's economy within six months? Didn't exactly turn out that way, did it? But I digress. Back to Greg and Brad:
Robert Gordon... says the past few years represent the continuation of a 35-year trend in which a growing share of all labor income goes to a small group of "superstars."... On top of this trend, income on capital -- such as interest, dividends, rent and capital gains -- has taken a growing share of national income from labor, and it "goes mainly to a small slice of the population at the very top."...Snow, of course, begged to differ:
Mr. Snow argued the administration's tax cuts have made the tax code more progressive, because the rich now pay a larger share of total individual taxes....However, it turns out that Snow was (big surprise here) lying:
The Tax Policy Center, a joint venture of the Brookings Institution and Urban Institute think tanks, estimates that after-tax incomes of the richest 1% of taxpayers were 4.6% higher in 2005 than they would have been without the tax cuts. Incomes of the middle 20% were 2.6% higher, and incomes of the bottom 20% were 0.3% higher.Ba-da-bing, ba-da-boom.
This country's best days, the days when we were thriving, were the days when upper marginal tax rates were highest. The prosperity of today is an illusion generated by trillions of dollars of deficits and people in debt up to their yarmulkes.
I have just done a fairly detailed examination of the performance of some top end financial companies. Their investments are doing terribly. Not only is net asset value down, but payments to shareholders are also down. Investors have shifted more sharply away from Bush than the general public. They used to be wildly in favor. Now they are about the same as the general public.
All but the brain-damaged understand that at a zero percent tax rate, there are no tax revenues. At 100% tax rate, revenues would probably be nearly zero (some people might work for fun). Somewhere in between zero and 100, there is an optimum.
Research has been done. An upper marginal rate of 70% generates the most revenue.
But what should the tax rate be? At least enough to pay the government's bills. Something that the deadbeats and kooks running the GOP are incapable of doing.
Alhough you didn't answer my question, at least you approached it. But I want whatever you've got that makes you think the country's best days were because of the economic prowess of a 90% marginal tax ceiling. Kennedy disagreed with you and cut that down (albeit to 70%).
Oh, and "Anonymous Coward"? "Even the brain-damaged"? That's mighty Christian of you. It's nice to know about the character of those who think what they do...
Instead, like the spoiled little kid that runs around poking people with sticks and then whines like the spoiled brat he is when he's caught, he tries to hold people to standards he himself refuses to honor.
So, 1) are you denying that you are posting anonymously? 2) are you claiming that posting anonymously is courageous?
The Kennedy tax reform of 1963 did not result in a rising deficit. It did result in ending tax shelters and loopholes by which upper income people avoided paying taxes, for example:
Present law permits a handful of high income taxpayers to take an unlimited deduction for charitable contributions, instead of the an to 30 percent of income normally allowable. These taxpayers for a number of years have made charitable contributions in an amount which, when added to their income tax liability, exceeds 90 percent of their taxable income--thus making the contribution fully deductible. Usually these contributions are made in substantially appreciated stock or other property. In this way the appreciation in value, without ever being subject to tax, constitutes a major part of the unlimited deduction. While naturally these generous contributions are beneficial, these taxpayers-given their otherwise high taxable income (up to several million dollars annually in some cases)--should not be escaping all Federal income tax as is the case today. They should be limited to the same 30 percent deduction for charitable contributions as everyone else.
The 1963 reform also did stimulate consumer demand by targeting substantial benefits to the poor and middle class. The Bush tax cuts have stimulated a lot of demand... for CPAs and Xanax. I have never seen the tax code more tangled and unintelligible.
The only reasonable answer to "What should the tax rate be?" is "Enough to pay the nation's bills." We don't pay taxes just to pay taxes, but to fund armies, establish a justice system, build highways, and so on. If we are at war or if natural disasters hit, tax rates may have to be very, very high. If we solve all our national problems, tax rates can be low. Anyone who thinks that one can just pick a number for what we should tax based on some form of ideological blindness doesn't know jack.
But 70% is the approximate upper marginal rate that produces the maximum revenue.
1. This is private property and you are a guest. Should we wish to delete all of your posts, we will. However, recognizing that one can learn things from even the silliest people, we would rather discuss matters with you as an adult.
2. Posting anonymously encourages certain people to behave badly and is strongly discouraged. You can always sign your name to a post. Better yet, to prevent spoofing, you can register at the Blogger main page.
3. Most people use a pen name on the Net. There is nothing cowardly about that. But it puts people on record, so that if they say something false or something brilliant, that pen name accumulates a reputation. It makes them accountable for what they say. Using multiple pen names as sock puppets is childish.
4. Anyone who posts on a site without being willing to reflect on contrary opinion and willing to change his/her opinion if facts warrant it is not behaving like an adult. He/she is behaving like a cult member.
I hope this clarifies what constitutes adult behavior.
2. If anonymous posting bothers you so much (and causes bad behavior), why offer it as an option for those posting comments? And as I have not behaved badly, you have agin introduced an off-topic, irrelavent subject.
3. Pen names can't be held accountable. Accountable to whom or what? And Shouldn't it be my decision whether or not I want to acquire a reputation as a genius or a fool? Then again, I know how much you hate individual choice.
4. You're hardly reflecting on what I have to say...so forgive me if I have trouble on the reflection side as your links have sent me to Daily Kos and to Marxist.com. I am not feeling the objectivity.
5. So there.
1. Again, this is private property. You are in my home. You have been asked to behave like an adult.
If you need this said more slowly, I can use ellipses. If you need it said more loudly, I can use capital letters.
2. We haven't turned off anonymous commenting as a convenience to reasonable people who prefer not to take the time to sign in. This can certainly change, but at our discretion, not at yours.
3. To my knowledge, we haven't deleted your posts. Since you haven't said anything, it would be an unnecessary step.
4. Could you please confirm that you wish to avoid having any accountability for what you say? Could you explain why any honorable person would want to avoid accountability for his or her statements?
5. No one here has claimed to be objective. While it's true that we read NRO, Free Republic and other right-wing sites more for the entertainment value than the educational value, we don't draw conclusions about a person's politics just because they link to those sites. Even blind squirrels can find acorns. If Marxists.com is right about something, then only a fool would spurn it because of the source.
5. Regrettably, there is nothing in these anonymous posts on which to reflect. If you wanted to express mindless anger and contempt, you succeeded. But frankly, who cares?
The thing that none of you conservatives rushing over at Sandi's behest have managed to do so far is to discredit, using actual facts in context, anything that Charles has posted. All you can do is try the time-honored College Republican/Leadership Institute divert-and-distract tactics -- which is in itself a tacit admission on your parts that you got nothin'.
I am not in your home. And by definition, I can act only like an adult.
"If you need this said more slowly, I can use ellipses. If you need it said more loudly, I can use capital letters."
I don't think either of these would improve your communication skills.
"2. We haven't turned off anonymous commenting as a convenience to reasonable people who prefer not to take the time to sign in. This can certainly change, but at our discretion, not at yours."
Thanks for clarifying. And more thanks for reminding me that it's not at my discretion... somehow I think you really thought I thought it was.
"3. To my knowledge, we haven't deleted your posts. Since you haven't said anything, it would be an unnecessary step."
I know you haven't deleted any posts. You brought it up and it had nothing to do with even the tangents on which we've gone off!
"4. Could you please confirm that you wish to avoid having any accountability for what you say? Could you explain why any honorable person would want to avoid accountability for his or her statements?"
Accountable to whom or what? I asked you this before... look at me asking you the same thing again as you have a question answering deficiency. But for the record: no, I do not wish to be accountable to you.
"5. No one here has claimed to be objective."
That says it all.
"5. Regrettably, there is nothing in these anonymous posts on which to reflect."
Because you refuse to answer the questions. You complain about policy and then offer an ambiguous reply (only sometimes) but when faced with direct questions, you have not responded. (Though I did coax that $6.15 out of ya! And by the way, nice backtrack on that one.)
"But frankly, who cares?"
You finally ask something thought provoking.
But please keep trying. Each time you or Sandi posts something, it gives us something to tee off on with actual facts and statistics in context -- none of which, I note, you bother to supply, because you have none.
but if you'd like, i tell you what... you throw at me whatever socialist ideals you want and i'll debunk them. or instead, keep bouncing them off charles so you can get some real insight.
You state what you are in favor of and-- as we have offered right wingers again and again-- I will create a thread specifically so that you can defend it. Since this is our site, it will be under our rules, but they're fair rules: basically that you have to debate an idea, not just attack a person, that you have to back up what you say with facts, and that you can't just ramble off into irrelevancy.
I don't think you can do it. I don't think you know anything or really even believe anything. I think inside you is a huge emptiness, a moral vacuum, an intellectual nothingness, a tangle of anger and ugliness that makes life a living hell for you.
I'm willing to be persuaded otherwise. But you're not winning.
More blogs about politics.