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| University of California, Berkeley |
Emmanuel Saez and Gabriel Zucman, professors of economics at the University of California, Berkeley, and the authors of a forthcoming book about "tax justice," write in the New York Times:
Alexandria Ocasio-Cortez has kick-started a much-needed debate about taxes. But the debate, so far, has been misplaced. It’s obvious that the affluent — who’ve seen their earnings boom since 1980 while their taxes fell — can contribute more to the public coffers. And given the revenue needs of the country, it is necessary.
But that’s not the fundamental reason higher top marginal income tax rates are desirable. Their root justification is not about collecting revenue. It is about regulating inequality and the market economy. It is also about safeguarding democracy against oligarchy...
That few people faced the 90 percent top tax rates was not a bug; it was the feature that caused sky-high incomes to largely disappear. The point of high top marginal income tax rates is to constrain the immoderate, and especially unmerited, accumulation of riches. From the 1930s to the 1980s, the United States came as close as any democratic country ever did to imposing a legal maximum income. The inequality of pretax income shrank dramatically.Note to the sane: You don't "safeguard democracy against oligarchy" by adding more rules, regulations and taxes. You do it by eliminating government rules, regulations and taxes that the rich and powerful can take advantage of. Government growth is the great killer that always suffocates opportunity.
Anyone calling for more government rules, regulations and taxes is usually in it to be in charge of the power grab.
-RW
"The point of high top marginal income tax rates is to constrain the immoderate, and especially unmerited, accumulation of riches."
ReplyDelete--
Notice how here, and everywhere with envy-burdened socialists, the fallacy at the heart of their misguided resentment is the belief that wealth accumulation is a zero-sum game; that when one party is doing well, then it must be at the expense of others.
Socialist envy extends to anyone who lives below their means. It's not just the "rich" they hate but anyone who builds any sort of reserve for himself. It could be some guy who works hard every day at some simple low paid job and lives in a tiny home in the cheapest part of town and they will still envy his savings, the product of his own discipline and long term thinking.
DeleteMeanwhile for those who live irresponsibly there are constant tales of woe and how they need 'help'.
Back in the last bust the NYTimes and others would run these stories of woe. One I remember I think was a NYT article. The tale of woe was of a family that lived in a seven figure apartment on park ave in NYC and how the new lower but still six figure income just wasn't enough for them to get by. Oh the horror.
I don't think its the rich they hate. Being rich may only be a possible symptom of what they hate. They hate thrift. They hate independence. Responsibility for one's self.
And they even constructed (or adopted) an economic theory to prop-up or validate their world view of envy: Keynesianism, which preaches and pushes the blessings of consumption and the tragedy of saving.
DeleteRight. Every bit of wealth created on a market necessarily means a need is being met somewhere. The more wealth, the more needs are being met. Both parties to an exchange are trying to improve their current state of being.
ReplyDeleteImplying that there is a need to moderate trade, it seems like these authors confusing market interactions (simply a series of trades) with something else.
Maybe they are confusing market "power" (providing value people choose to depend on) with state power (forcing people by violence to interact)?
To moderate and impede a voluntary exchange environment is to necessarily inflict more suffering on the people who are no longer allowed to exchange as they would otherwise.
The only ummerited wealth out there is the wealth created in the unilaterally coercive interactions imposed on by the state...and the authors are expressly stating they want more of that.
The inequalities of conditon they are rallying against are in reality just the areas that entreprenuers have not found sustainable solutions for yet - or are prevented from entering due to state competition. But like any market venture, these areas will require overabundance of wealth to even get started in. Yet, again they propose further constraining the people who may actually be able to alleviate these needs?
And even in the cases where true charity is the requirement, why impede the creation of wealth that would only feed that charity?
Indeed. Folks like this only focus on the receipt of income, and not on how it is actually generated. This is probably because there is no room for the entrepreneur in Keynesian economics. According to Keynesianism, if there is no perfect competition -- if the market is in disequilibrium -- then the state needs to intervene. Austrians, of course, see disequilibrium as both the natural state of affairs and the reason entrepreneurs act; those who successfully satisfy preferences earn more, and those who fail earn less.
DeleteAccording to a report for the California Policy Center by Marc Joffe dated June 16, 2016, Emmanuel Saez made a total of $349,350 based on 2014 data - this doesn’t count any outside earned income from speaking engagement, etc. or pension contributions. That salary places him in the top 1% of UC Berkeley’s salary distribution. Based on data from the Urban Institute, the “rich” in 2014 earned greater than $350,000.
ReplyDeleteI wonder if Saez is willing to share any of his income with those who suffer under inequality’s thumb?
I have a dumb question. Wouldn't this rate only apply to ordinary income? Aren't most gains from monetary expansion taxable only at the capital gains rate on asset appreciation?
ReplyDeleteI laughed at this Bob the irony was irresistible. What would happen if there was an inescapable ironclad flat tax for the rich? No loopholes and these 1 percenter's would be screaming bloody murder ... so funny
DeleteI've always gotten upset when I hear someone say that the rich must pay their "fair share." Conveniently, they never define it. Well, I guess now they have -- it's 70%.
ReplyDeleteAOC and these "economists" are saying nothing new. Here's FDR, addressing Congress in 1935:
Our revenue laws have operated in many ways to the unfair advantage of the few, and they have done little to prevent an unjust concentration of wealth and economic power.
Social unrest and a deepening sense of unfairness are dangers to our national life which we must minimize by rigorous methods. People know that vast personal incomes come not only through the effort or ability or luck of those who receive them, but also because of the opportunities for advantage which Government itself contributes. Therefore, the duty rests upon the Government to restrict such incomes by very high taxes.
As I put it on Twitter after one progressive journalist said “we all know this system is rigged against the poor, so this is a good way to go”
ReplyDeleteI said yes the system is rigged against the poor. The government has a Monopoly on violence. Politicians and buerocrats aren’t just innocent bribe takers. And your solution is to give the government more money to continue to rig the system.