Contributors

Thursday, October 27, 2011

Good News and Bad News

Today brings a mixed bag of news, good and bad.

The good news is that the economy grew at a rate of 2.5 percent in the third quarter. This quarter of growth marks the ninth straight quarter of growth since July of 2009 when the president's policies began to take serious effect. The main reason for this growth is consumer spending and confidence which may give us an indicator that things are getting better.

The other reason cited made me laugh out loud.

A measure of business investment plans rose in September for the second straight month and by the most in six months, according to a government report Wednesday on orders for longer-lasting manufactured goods.

Wait...what? I thought there was all this uncertainty. Ah well, folks who were saying this will probably admit they were wrong and just be happy, right? :)

I'm happy to be somewhat wrong about consumer spending. I say "somewhat" because my initial glee at seeing that consumer spending was up was tampered by this:

Economists believe that growth in consumer spending, which accounts for 70 percent of economic activity, will be restrained until incomes start growing at healthier levels, which is unlikely until hiring picks up.

This brings us to the bad news. The CBO just released a report titled, "TRENDS IN THE DISTRIBUTION OF HOUSEHOLD INCOME BETWEEN 1979 AND 2007." It is yet another example of the detrimental inequality in this country. Here are some of the bullet points.
  • 275 percent for the top 1 percent of households,
  • 65 percent for the next 19 percent,
  • Just under 40 percent for the next 60 percent, and
  • 18 percent for the bottom 20 percent.
275 percent? With 70 percent of this economy consumer spending, this is simply ridiculous.
  • The top fifth of the population saw a 10-percentage-point increase in their share of after-tax income.
  • Most of that growth went to the top 1 percent of the population.
  • All other groups saw their shares decline by 2 to 3 percentage points.
Again, with consumer spending making up 70 percent of this economy, these facts present a very clear picture as to why our economy is still not growing as it should. The IMF agrees..

Somewhat surprisingly, income inequality stood out for the strength and robustness of its relationship with the duration of growth spells: a 10 percentile decrease in inequality (represented by a change in the Gini coefficient from 40 to 37) increases the expected length of a growth spell by 50 percent.

My enormous frustration lies in the fact that as soon as something like this is pointed out, screams of "Socialism!" are usually not far behind. This, from the very same people who claim to want to make more money and have more efficient economies. Defining the principle units of an economy (consumer spending being the main one) and working to improve those units functionality should be the goal towards which all of us strive, right?

We no longer have time to manage theological fantasies. If we want to fan the flames of this recent good news of growth, we need to tackle the issue of inequality. Now. Me being me thinks that this should fall to our elected representatives on a local, state and federal level. If you ask an Occupier, though, the government isn't going to help.

It's going to be up to us.

36 comments:

Juris Imprudent said...

Ah well, folks who were saying this will probably admit they were wrong and just be happy, right? :)

If the economy is finally recovering and returning to growth, yes, you bet I am happy. If it were me though, I wouldn't be crowing about how great my team has done in contributing to that.

And what is your obsession with Gini and inequality. You admit that there will be inequality (because after all - there are differences) but you can't say what is the right amount of inequality. You have no principled basis for saying so - just some internal moral calculus. So why is your moral position better than anyone elses?

last in line said...

Juris, did you catch this from the post..."This quarter of growth marks the ninth straight quarter of growth since July of 2009 when the president's policies began to take serious effect."?!?!?!

Hell it was only last month where Mark was saying "the American people blame Bush first, then Wall street, then Congress, then the president.".

...and I predicted the credit for good economic news would bypass 1-3 and end up right on #4.

I rule.

rld said...

I seem to remember plenty of "Like it or not we're still operating under the Bush tax cuts dude" recently on this blog. Because of that, I credit the Bush tax cuts for the recent growth. Now go tell those Occutards that economic growth is happening.

Mark Ward said...

Well, rld, to a certain extent you are correct. If 70 percent of the economy is consumer spending and most of the consumers have lower taxes, the economy will do better. The president's policy has always been to make the tax cuts permanent for most Americans. I agree.

The problem with the tax cuts (and the tax system as a whole) is that the wealthy aren't paying their fair share. The problem with our economy as a whole right now is inequality. The chief gripe of the OWS movement is inequality, not just in income and wealth, but opportunity. This inequality will continue to prevent us from substantial growth and make us less competitive in the global marketplace.

Last, I think you may have misunderstood me. My comment regarding 9 straight quarters of growth had more to do with the "failed" stimulus than current economic news.

A. Noni Mouse said...

The president's policy has always been to make the tax cuts permanent for most Americans. I agree.

ROTFL!!!

Markadelphia said:

Then how do you account for the Bush Tax Cuts lowering revenue by $1.3T from 2001 to 2011?

The fact is that all of the evidence points to tax cuts making things worse.

Blackwhite

Applied to a Party member, it means a loyal willingness to say that black is white when Party discipline demands this. But it means also the ability to believe that black is white, and more, to know that black is white, and to forget that one has ever believed the contrary. This demands a continuous alteration of the past, made possible by the system of thought which really embraces all the rest, and which is known in Newspeak as doublethink.

Mark, I bow to your Mad Skilz

Mark Ward said...

I'm afraid you have missed the fact that there is nothing incongruent about my current and previous statements. The tax cuts have made things worse from an inequality standpoint and the lost revenue from all the breaks that the wealthy still enjoy. On the same token, those who are taxed at higher rates (the middle class) getting a tax break is a good thing because they spend money. In the final analysis, it's all about fueling the engine of the middle class...the demand side of the equation...which is quite Keynesian when you think about it.

You're not really thinking with a width of vision about stimulus. In fact, if anyone has an incongruent problem, it's you. You rip the stimulus and the jobs bill but both are filled with tax cuts.

juris imprudent said...

The problem with the tax cuts (and the tax system as a whole) is that the wealthy aren't paying their fair share.

What percent of total income taxes should the top 1, 5 and 10% be paying - that you would consider to be their "fair share"?

GuardDuck said...

He won't answer that juris, he won't like how you framed the question.

Juris Imprudent said...

I know he won't - it isn't an empirical question for him, it is a moral imperative. They can never be taxed too much.

Mark Ward said...

Are you guys capable of being anything other than childish?

I answered your question, juris, a long time ago. I'm surprised that you forgot. I'd like to see taxes for the top percentiles returned to what they were under Clinton which was 39 percent. I'd also like to see the cap gains baloney gone and the elimination of the loopholes and breaks that the wealthy enjoy. Guess what? So would they.

http://blogs.wsj.com/wealth/2011/10/27/most-millionaires-support-warren-buffetts-tax-on-the-rich/

Of course, this is only going to solve about a third of the problem. The other two thirds are going to come from cutting defense spending, means testing SS and eliminating those who don't need it, and raising the age for Medicare from 65 to 67.

A. Noni Mouse said...

What percent of total income taxes should the top 1, 5 and 10% be paying - that you would consider to be their "fair share"?

Average Federal Income Tax Paid by Income Category

'Nuff said.

Mark Ward said...

Noni, you're not being entirely honest. That's the tricky thing about taxes. I have a post about taxes coming soon but here's a preview.

While it is true that the richest 5 percent of Americans pay 57 percent of all income taxes, these same folks have also seen their income rise over 56 percent in the last rise while income in ever other group has declined. In other words, you're not looking at the whole picture....surprise surprise...

GuardDuck said...

So in other words Mark, you don't actually care how much of the tax burden is borne by the rich - you only care how much money is taken from them....

thanks for clearing that up.

Haplo9 said...

>While it is true that the richest 5 percent of Americans pay 57 percent of all income taxes, these same folks have also seen their income rise over 56 percent

What percentage should the richest 5 percent be paying, if you don't think 57 percent is enough? 60? 70? 80? Lets have some specificity here Mark. Do you have a rationale for arriving at such a number? What is your reasoning for concluding 57 percent isn't high enough?

Mark Ward said...

The problem with you two here is that you are only focused on the portion part of the equation and not the ENTIRE reality, hence the Fox News weasel style questions. There's no other information allowed into discussion other than what portion of federal revenue is paid by the wealthy. It's not surprising that you want the attention paid to this fact because that's how you "win the argument" and "prove me wrong."

Here's another example of only telling half the story:

The top 400 earners in this country pay a higher effective tax rate than almost half of the income earners in this country because that half pays no federal income tax due to deductions and credits.

This would be another fact that you would champion, no? The problem here is that those people who don't pay federal income tax certainly do pay other taxes and thus are not the freeloaders that you folks make them out to be. As we have also seen, there are many corporations that pay no income tax as well. Moreover, the wealthy don't actually pay the 35 percent statutory rate now and pay around half of that due to their own credits. So, there are far too many credits right now for everyone to pick a number and go with it. I think we can all agree that the tax system needs to be completely overhauled because it is obviously wasting revenue opportunity.

Of course, the other element to all of this is your theology about spending. There is little hope of having a rational discussion with either of you about that as I have sadly learned.

rld said...

Wasting revenue opportunity. Oh the opportunities the government doesn't take advantage of.

Haplo9 said...

>The top 400 earners in this country pay a higher effective tax rate than almost half of the income earners in this country because that half pays no federal income tax due to deductions and credits.

This would be another fact that you would champion, no?

Er. Wouldn't it be just as accurate, and meaningless, to say that half the country has a higher effective tax rate than almost half the rest of the country because that half pays no federal income tax? What I would "champion" are a number of simple principles:

1. Some large % of everyone should have some skin in the game when it comes to paying for the government. Needing welfare seems like the only reasonable exception.
2. Complicated tax law encourages tax law capture, tax avoidance, and results in large compliance costs. These are all effort and resources that would be much better used elsewhere. In other words, it shouldn't be more profitable to lobby Congress for a tax loophole than it is to go out and make a better widget. But today, it likely is. That is broken. But thats what you get when you have a powerful government that can dole out favors.
3. High taxes generally discourage investment, and result in less of things we want. Like jobs and prosperity.

That is a loose description of my principles, what are yours? Do you even have any?

I'm just curious if you have a coherent rationale for what you want. You've mostly got your sound bites (fair share! income inequality!) but I can't discern any reasoning behind them, they just seem like the generic lefty whinges of the day. I honestly have no idea what kind of tax system you are advocating for, because it gets lost behind your penchant for constipated rhetoric. For example, lets construct a little scenario here:

Imagine I'm John D Fatcat, and I make 1 million a year. My effective tax rate is 40%. (No, I'm not saying this is the actual effective tax rate for a person that makes a million, this is a hypothetical.) So I pay 400,000 a year in taxes. Now, next year, my income goes up by your 56%. So I make 1,560,000. If my effective tax rate is the same as it was before, I now pay 624000 in taxes, a 224000 increase over the previous year. So I'm paying more in taxes when my income has increased. So.. based on what you said upthread, you don't think that 224000 increase is enough, I guess? Why so or why not?

>hence the Fox News weasel style questions.

Lol you are pathetic. Questions intended to get you to explain your reasoning and/or rationale behind your claims are "weasel style questions". I discovered a video of you on youtube!:

http://www.youtube.com/watch?v=izTIqUSDcR8

On a side note, I've never understood what you mean by your use of "winning the argument" as a pejorative. An argument is a discussion in which people try to persuade each other of something by presenting evidence or reasoning. "Winning the argument" would mean that you have successfully presuaded someone else of your position. It's true that I consider you to be so blindly dogmatic that I'd never expect you to be persuaded of anything that didn't fit your preconceived narratives, despite your heroic attempts to claim that you aren't like that, but why would "winning the argument" otherwise be a bad thing? It's like playing tennis and suddenly realizing that hey, the other guy is actually trying to win here! Duh?

Mark Ward said...

3. High taxes generally discourage investment, and result in less of things we want. Like jobs and prosperity.

Wrong. People don't invest because of taxes or "uncertainty." People invest to make money. Under your logic, investment would have been largely non existent in the from the late 40s to the 1980s.

That is a loose description of my principles, what are yours? Do you even have any?

Except that they aren't really principles. It's three general adolescent gripes about government. And I state my principles many times on here. It's not my fault that you don't listen. Mine begin with the fundamental facts that say that welfare capitalism works.

In other words, it shouldn't be more profitable to lobby Congress for a tax loophole than it is to go out and make a better widget.

And yet your support laws that define corporations as people, no? That seems to directly fly in the face of what your ideology espouses. At the end of the day, Hap, you can't escape the reality that governments has to be involved in markets and can, sometimes, make them more efficient. As long as that is the case, there are going to be lobbyists even if they are simply arguing over property rights.

I'm just curious if you have a coherent rationale for what you want. You've mostly got your sound bites (fair share! income inequality!) but I can't discern any reasoning behind them,

Projection/Flipping...Ad Hominem...and probably a few more of the 14. Same pattern...

1. Sense accuracy in what I write
2. Start to shit self.
3. Get pissed
4. 8 year old temper tantrum and begin personal attacks in the hopes of discrediting me.
5. Ask questions that have been answered time and again in the hopes of finding a little kernel of something to pounce in AND avoid explaining the massive flaws in Randian theology.

I've never understood what you mean by your use of "winning the argument" as a pejorative

Of course you can't. To someone who thinks with your sort of ideology, it's all about proving someone else wrong. You don't go for "winning the argument" by offering much in the way of your own ideology. You simply use Nixonian tactics to paint your opponent's ideology as horrible.You just did it again (for the 900th time) to me in your last comment. The focus is very rarely on your principles and summative evidence. It quickly turns to personal attacks on me, childish dishonesty, and obsessive scrutiny on what I write.

So, maybe you should do something like comment on the IMF report that I linked in this post. You say you have a set of principles. How do they coincide with the data in this report?

Haplo9 said...

So to restate Mark's response:

1. You are a poopiehead.
2. I state my principles all the time. Just.. not here, in response to your question.
3. I don't like your hypothetical, so I'm going to ignore it.

Fool yourself all you want Mark. :)

>People don't invest because of taxes or "uncertainty."

.. Not quite what I said. Heh. One comment on, and you've already mutilated what I said into a voice in your head. But by all means, explain yourself Mark. Are you claiming that tax rates have no impact on the decision to make an investment? That, say, a tax rate of 50% on profits will not factor into an investor's decision to invest versus a 10% tax on profit?

>And yet your support laws that define corporations as people, no?

Regardless of whether I do or I don't, what does that have to do with lobbying Congress for special tax favors? You're not making sense Mark. (Surprise, surprise.) If the tax code is s snarled nest of loopholes and special giveaways to favored constituencies, what does it matter if corporations are considered persons or not? I'd imagine they could lobby for favors either way.

>At the end of the day, Hap, you can't escape the reality that governments has to be involved in markets and can, sometimes, make them more efficient.

Nonsense. In the case of markets with negative externalities (such as pollution), I have yet to see a good way the government cannot be involved, despite its drawbacks. What I'm otherwise doing is pointing out the severe distortions and drawbacks that come from government involvement - things you seem intent on ignoring or minimizing.

>Except that they aren't really principles.

I would call them precepts which happen to be rooted in reality, and especially the reality of human nature, but whatever. I wasn't trying to get into a discussion about the truth or falsity of those principles (knowing how fruitless that would be with you), merely stating where I am coming from. Are you going to answer the question? Do you have any simple, easily understandable principles which guide your thinking on this subject? Or do you just kind of start with "welfare capitalism works because of fundamental facts!" and anything you say after that becomes a "principle" of yours?

>To someone who thinks with your sort of ideology, it's all about proving someone else wrong.

Even if that were true, again, why is that bad? Proving someone else wrong implies that you have exposed an argument for being flawed, from which all participants can learn from and not use the same flawed argument in the future. That is bad.. why?

>The focus is very rarely on your principles and summative evidence. It quickly turns to personal attacks on me, childish dishonesty, and obsessive scrutiny on what I write.

You may not have realized this Mark, but this is your blog. You write things on it. When I comment on your blog, I am, by definition, commenting on things you wrote. What else do you think I'd be focusing on except what you write? You may have also noticed that you make a lot of claims on this blog. Not surprisingly, when I comment, I often focus on those claims and the reasoning (or confused lack thereof, as is so often the case) you have for them. Again, what else do you think I would do, commenting on your blog? Dear god. Stop whining.

Mark Ward said...

Nonsense. In the case of markets with negative externalities (such as pollution), I have yet to see a good way the government cannot be involved, despite its drawbacks. What I'm otherwise doing is pointing out the severe distortions and drawbacks that come from government involvement - things you seem intent on ignoring or minimizing.

Government should protect property rights. That's not nonsense. Regarding pollution, pollution permits that are auctioned or traded still create a market whose efficiency can be seen. They might not be fair but they are efficient. You're also not considering other, measurable benefits that not having pollution brings. But, hey, anything with government involvement=bad, right? That's where you start from and that's the main reason why it's almost impossible to have any sort of sane discussion with you.

I guess I'll try again with a question for you: should the government have laws against drunk driving? How strict should they be? After you answer (only if you want to and have the time), I will demonstrate how you can't really escape the whole lobbying thing. I'm not a fan of it either but it comes with the territory.

Do you have any simple, easily understandable principles which guide your thinking on this subject?

Of course I do. I guess I'm wondering why you haven't been paying attention. I think the federal government has done an enormous amount of good in this country and abroad. Social Security, for example, has reduced poverty in the elderly by over 40 percent. The Civil Rights Act finally did away with segregation. Aren't both of these beneficial to our society today?

I don't believe in centrally planned economies and think that free market fundamentals should spread around the world as capitalism is the best way to increase prosperity for more people in the global marketplace. I am generally against protectionism and think that there are many people that are just going to accept that we have a very large pool of labor now.

I do agree that we are overregulated in some markets but underregulated in others. An example of the former would be manufacturing. An example of the latter would be the financial sector even with Dodd-Frank in place.

Welfare capitalism means having a balance of social programs while allowing the market to live and die on its own. It's not quite the social market economy of a country like Germany, for example, but it does fit best for our country's unique structure and position in the world.

These are just some general basics but, again, I'm repeating myself. I don't think you really want an answer because you are interested or curious. I think you want me to write more things so you can run with your pattern that I listed above and begin the adolescent dance all over again. It's all part of the general avoidance that you and some others do.

I would call them precepts which happen to be rooted in reality, and especially the reality of human nature, but whatever. I wasn't trying to get into a discussion about the truth or falsity of those principles (knowing how fruitless that would be with you), merely stating where I am coming from.

Because you can't really point to many examples of how libertarian-anarcho-capitalism works or is "rooted in reality." I can point to many examples of how my principles work in reality. I did so with two such examples above. Where are yours?

Haplo9 said...

>Government should protect property rights.

Wait, what? When did I, or anyone on your blog for that matter, say that the government shouldn't be involved in protecting property rights? This is why clarifying questions (ie "did you really mean x?) are useful Mark, they help you avoid ascribing flatly untrue beliefs to your opponents, like you just did there, and they help understand another persons position. A pity you seem to think that answering such questions is beneath you. Here is a clarifying comment about me - when I rail about government interventions into the economy and how many problems I think it causes, I'm talking about, you know, interventions. Things that the government makes various entities do because it thinks it knows best. (Or more likely, some member of Congress has a constituent to please.) The notion of property rights, and the enforcement of contracts is quite a bit different than tax rates and Cash for Clunkers, don't you think?

>Regarding pollution, pollution permits that are auctioned or traded still create a market whose efficiency can be seen.

Yes, I took an environmentalism class in college too, and they thought this was wonderful. I'll ask you again - do you know of an example where this actually works? Seems to me that the players in the market with the deepest pockets and/or political pull will have a great time manipulating such a market in their favor. But yes, despite its drawbacks, regulating an externality like pollution is something only the government can do.

>But, hey, anything with government involvement=bad, right?

No, more accurately, government intrusions into markets always have tradeoffs, which sometimes far outweigh the benefits. Proponents of said intrusions typically ignore or minimize the tradeoffs (especially if they are running for office), and highlight the benefits. While you aren't running for office that I know of, you do that all the time here, when you do things like laud Social Security for reducing elderly poverty, without seeming to care that the program is now paying out more than it takes in, and thus a drain on the general treasury.

>should the government have laws against drunk driving? How strict should they be?

Should as in "has the power to" or should as in "is a good idea"? States most certainly have the power to make drunk driving laws; public roads are owned by the state, and so making laws governing their use is quite reasonable. As to whether they are a good idea, I don't know how effective they are. Such laws certainly don't stop people from driving drunk, but maybe reduce such incidence. How strict should they be? I'd imagine it varies, but I'd be ok with pretty strict laws myself, as especially from driving in cities, I've learned to have very little trust for other people's driving skills, or my own, when sober, much less drunk.

Haplo9 said...

>Of course I do.

Sigh. And you then go on to list a bunch of things, none of which have anything to do with the subject we were discussing, and which the principles I listed were related to - taxes. Remember? Rather than list my disagreements with your principles and horrendously dive off on a tangent, I'll leave it at that. Feel free to list your principles related to taxation.

>Because you can't really point to many examples of how libertarian-anarcho-capitalism works or is "rooted in reality."

Wow. I list 3 general principles that I think are true related to taxation, and believe reflect human nature. (In particular, the human nature to be greedy.) How does that translate to advocating for "libertarian-anarcho-capitalism", whatever that is. I take it from all this blather that you don't think those principles are rooted in reality though, so I'll give you some examples:

1. regardling having a large % of people having some skin in the game, this isn't really an evidence based principle, it's just a statement of something I think will lead to problems. If a majority of people in the country don't pay taxes, then those people will have little interest in how tax money is spent. This will lead to waste and corruption, as there would be no electoral consequences to such things. Worse, if they are net recipients of tax money, they won't suffer any adverse consequences of voting for (or voting for politicians who want) higher taxes. Finally, if the government is funded by an ever smaller slice of people, then government funding becomes progressively more volatile, as the fortunes of the government depend more and more solely on the fortunes of that slice of people. As an example of what can happen, see http://online.wsj.com/article/SB124329282377252471.html.
2. Regarding complicated tax law: I don't see how this one is very arguable. Tax compliance alone costs 6.6 billion hours per year, which is something like $340 billion a year, depending on who you ask. Is that a good use of economic resources? As to tax loopholes, you are already on board with this, from what I have been able to understand. Though I don't think either party has the slightest interest in reforming corporate tax law, for the same reason that neither party is interested in stopping earmarks - its how they are able to reward friends and punish enemies.
3. I've already asked you some clarifying questions about whether you think (as you seem to) that tax rates have no bearing on investment decisions, which you have yet to answer. I would point out that its pretty likely you have altered your very own investment decisions due to tax rates, perhaps even without realizing it - have you ever held onto a stock that you otherwise wanted to sell to get past the year mark, and thus get the lower capital gains tax rate? If so, you took on risk that you wouldn't otherwise have taken on (the risk that the stock would go down) in order to get a better tax rate when you sold the stock. In other words, you changed your investment behavior in response to taxes. Happens all the time. Er, do you need links to that?

Feh. I'm too tired to go back through and point out all the clarifying questions that you ignored. Trying to get you to think through your positions on just about any subject is like wading through mud.

juris imprudent said...

Classic M, truly classic. Tell me, when a student doesn't answer a question on a test - but gives an "answer" to a question you didn't ask, how do you grade him?

Or is "passing a test" too much like "winning the argument"?

Mark Ward said...

do you know of an example where this actually works?

I'll give you an example but I want you to look at it critically and not do your usual BS.

http://www.epa.state.il.us/air/erms/apr/

If I sense the pattern starting again, I'm done with this topic. The data is all there for you to see.

without seeming to care that the program is now paying out more than it takes in, and thus a drain on the general treasury.

I do care and that's why I support means testing and raising the age of retirement. We really don't have a choice.

I'd be ok with pretty strict laws myself, as especially from driving in cities, I've learned to have very little trust for other people's driving skills, or my own, when sober, much less drunk.

I agree. We have seen some fairly strict DUI laws of late in MN. But the result of this is that restaurant and bar owners see it as more profitable to lobby our state legislature than try to figure out ways to sell more booze. With stricter laws, less people go out and drink and many just stay home. That's government interference in the market. I agree, it's for a good cause and it's worth it but here's where we get into a qualitative analysis. You and I probably have different ideas of when it's OK for the government to interfere in markets.

the human nature to be greedy.)

I agree. So why do you support deregulation for the financial sector of this country? Only the government is greedy and craves power?

If a majority of people in the country don't pay taxes,

But that's only true of federal income taxes. People still pay other taxes. You are starting off here with something that's not really true.

I do agree with you regarding complicated tax law and I think you would agree that subsidies distort the market just as much as taxes. I'm absolutely for an overhaul of the tax system to create more revenue.

Mark Ward said...

tax rates have no bearing on investment decisions, which you have yet to answer.

I'm not much of a player in the market these days. I used to be until 2008 and then I was done with that fucking bullshit. What you are suggesting really doesn't make any sense. If you have an investment opportunity and stand to make a good deal of money, are you going to sit back and think....hmmm, what are the taxes going to be? You snooze you lose, right? Someone like Warren Buffet didn't get where he was by worrying about taxes and he says basically the same thing I do so I guess he's pretty much a fucking moron when it comes to investment in your eyes.

Regarding specifying the topic at hand, I was under the impression that we were talking about more than just taxes. Taxes are really just the starting point for an overall question of how the government should operate. It's clear to me that a progressive tax system is the most effective and, honestly, the most fair. I don't know what other system would work. Do you have an alternative?

Juris Imprudent said...

It's clear to me that a progressive tax system is the most effective and, honestly, the most fair.

Of course I asked you how progressive it should be - as in, what percent of all income tax should be paid by the top 1, 5 and 10%. You refused to answer. Why is that?

Juris Imprudent said...

Heck, I'll even give you another out (because I know you'll take it) - what is the definition of fairness you are using? As in, what is fair about the share you want the highest income earners to pay? Is there any principle involved, or is it just a number that you like?

Mark Ward said...

Ah, I see the problem here. I thought you were asking about statutory rates. My mistake.

There's not a specific number that I can pick because your question is too simple and/or a weasel one...what a shock. You aren't accounting for the big picture here. It seems unfair that the top 5 percent pay 57 percent of all income tax. Yet their income has risen 56 percent while the income of all other groups has declined during that same time. It seems unfair that we've gone from 1980 when the top 1 percent paid 20 percent of total income tax to today where that same percentile now pays 40 percent. Yet their statutory rate has dropped from 70 percent to 35 percent...likely less when you figure cap gains into the equation. It seems unfair that the top 400 earners pay taxes while about half American households pay no tax. Yet these earners only pay an effective rate of 18 percent when you figure in deductions, credits, loopholes. So, Buffet's secretary is paying twice his rate. It seems unfair that the top 10 percent of this country account for 45 percent of all income taxes while earning 33 percent of all income-a ratio that is higher than any other industrialized country. Yet the tax rate in the UK is 50 percent...40 percent in France...42 percent in Germany...50 percent in Japan for the same top earners while here it is 35 percent...but not really. Essentially, you are focusing on half of this information-the half that supports your ideology.

So, what I am saying (as I always do) is think critically and look at all sides of this. More importantly, all of these facts have created a system of growing and detrimental inequality (see the recent IMF report that I linked) that is harming our ability to compete in the world. Obviously, it's not working and needs to change. How do we do it?

GuardDuck said...

And your solution seems to be to reduce the wealth available to the top rather than increase the wealth available to the bottom?

Imagine these two scenarios:

1: The top percentiles income increases by 60% while the bottoms increases by 20%. This increases the disparity you are concerned about.

2: The top percentiles income reduces by 20% while the bottoms stays the same. This reduces the disparity you are concerned about.

Which scenario is better for the people and the country?

Does this mean that income disparity is not as relevant as you keep harping on?

juris imprudent said...

There's not a specific number that I can pick

I expected no less of you. How sad for you. You talk and talk and talk, and in the end - you say nothing. No wonder your students must love you - they all get A's no matter what happy horseshit they give you.

So, Buffet's secretary is paying twice his rate.

Maybe she wouldn't be if his company wasn't trying to cheat the Feds on their corporate income tax. Of course Buffett still is part of a group that pays MORE taxes than his secretary's cohort. You just can't seem to grasp that part - probably your envy getting in the way.

Mark Ward said...

You talk and talk and talk, and in the end - you say nothing.

I'm not the one refusing to comment on the data I provided above. That's not "saying nothing." Now you are just being silly and childish...again. You're just pissed off that I didn't answer your baiting question which would then allow you to shout about Marxism, statism and all that other nonsense.

Of course Buffett still is part of a group that pays MORE taxes than his secretary's cohort. You just can't seem to grasp that part

What you are saying is true...if you ignore the other half of the information that I provided above. You are not being honest, not being a critical thinker, and focusing in on only the data (confirmation bias) that aids you in proving me wrong. Same shit, dude.

Which scenario is better for the people and the country?

Neither. Why does it have to be an either-or? First, we have to all agree that the current income inequality is a) real and b) a problem for our country. Bear in mind, I have no problem with inequality in general-just the ridiculous inequality we have now. If you agree with both a and b, then we can move forward on solutions.

juris imprudent said...

Of course you can't say why it is bad. After Manzi it was supposedly about our social fabric somehow being frayed; a point that neither he nor you could elaborate on. Now you suggest that it is somehow bad for growth, with at best some data (from IMF) showing correlation - not causation.

Buffett and his income cohort pay more income taxes than his secretary and her cohort - fuck the rates you are so obsessed with. Perfect example of the liberal/progressive myopia with good intentions over actual results.

Nor do you have any definition of what "fair share" means - other than if you feel you are fucking someone with more money than you it must be good.

Mark Ward said...

Have you really looked at the data provided by the IMF regarding inequality? I'd urge you to review that material more carefully and then we can discuss the finer points as they answer your question. As to the rest of your comment, it's little more than the spewing of a petulant adolescent.

GuardDuck said...

Neither

Well now I'm confused Mark.

For the last several years the recurring theme (relevant to this topic) around here is that

1: there is too much income inequality and

2: the rich have too much money - to the point that you constantly want to increase taxes, regulations and prosecutions upon the rich.

So in my hypothetical scenario #2 I gave you exactly what you wish and you say no?

Perhaps I don't understand what you want. Maybe there is some key element to your grand strategy that you have neglected to share with us.

Mark Ward said...

there is too much income inequality

True, there is too much income inequality and needs to be less unequal. How much less obviously depends on a variety of factors.

the rich have too much money

They only have "too much" if it's putting a drag on society and they are essentially acting like the mob when they bust a joint out. There have been plenty of other times in our country's history where the rich have had a ton of money but it hasn't been at the expense of our country as a whole.

constantly want to increase taxes

I only want to increase taxes because that's what has to happen in order to handle the debt. It can't just be spending cuts.

regulations

Fuck yeah. Deregulation is what got us into this mess. It's monumentally frustrating that you refuse to see this.

prosecutions upon the rich.

Only when they break the law and commit fraud which is exactly what happened. As of yet, no prosecutions from the 08 collapse but that's largely because the government is too timid and/or neutered.

you say no?

Well, how would you reduce it? Just go and take their money? This is pretty vague to me.

I don't have a "grand strategy." I'm simply defining the problem and exploring possible solutions. Stop thinking of me as the caricature that you guys created. This view you have regarding "liberals" is severely colored by your Randian theology. Atlas Shrugged is a science fiction book...FICTION.

The crux of the problem here is you won't accept that our current level of inequality is a bad thing. In fact, you hear the word "inequality" and immediately turn to your catechisms and become apoplectic. Let's see if we can get past that point and then we can talk about possible solutions.

juris imprudent said...

then we can discuss the finer points as they answer your question

Ready to discuss causation as soon as you or the IMF propose such. At best they have some data that shows correlation. If you don't understand the difference, then you go bone up on the subject. I'll wait.

Considering your track record on the fraying of the social fabric, I'll have a loooooong wait.

You could of course actually define "fair share". You think you could do that, or are you too afraid to have a real, tangible opinion other than your punk moralistic posturing?