I’m sure you could find a less embarassing conservative for the NY Times op-ed page
Reading Ross Douthat’s (terrible) column this morning, I really only have three thoughts:
1) Someone should tell him to shy away from writing policy columns; not only is he not very good at them, but he has this very strange aversion to, you know, facts.
2) On that note, if Douthat had taken a little bit of time to research, he would have quickly found that despite having a progressive federal income tax, the average tax rate for the richest 400 Americans is 17.2 percent. What’s more, the effective tax rate for the richest 1 percent of Americans is about 31 percent, which is quite low in historical terms. Contra Douthat then, the tax code isn’t even really that progressive on the margins, in a variety of ways, it offers a whole host of breaks and deductions for the wealthiest Americans, at the expense of services for everyone else.
3) I find it very strange that Douthat would write an entire column criticizing Democrats for having yet to deliver on promises to reduce income inequality without once mentioning that said inequality has been stoked by conservative enthusiasm for massive tax cuts/giveaways for wealthy Americans. Or, to put it more succinctly, hidebound teachers unions and illegal immigration certainly doesn’t help us tackle the root causes of inequality, but it’s extremely disingenuous for Douthat to argue that the tax code is basically irrelevant to this discussion. It’s not. The incomes of high earners rose dramatically in large part because we stopped taxing them. So again, pace Douthat, the single best thing we can do to reduce income inequality – in the short-term at least – is to simply tax the rich more, either by raising marginal tax rates, reinstating the tax on capital gains, or – better yet – instituting a continuous marginal tax (which I discussed briefly here).
4) And finally, I wonder how Douthat explains away northern Europe’s high economic growth rates and robust welfare state?
Douthat is like your arch-nemisis, Jamelle. You should challenge him to a duel.Report
What would be the weapons? I mean there are some hefty treatises on the left but they’d have to be very hefty indeed to match the bible for sheer size. Not to mention that I’ve heard that Rand wrote Atlas Shrugged specifically with an eye towards the bound tome being used as a weapon.Report
You know, I really should.Report
But it’s good. Ross gets a lot of love from the blogosphere. We like seeing “one of our own make it”. He needs someone keeping him honest.Report
On point #4 Jamelle he’d probably assert that Northern Europe is culterally homogenious and that while they have a generous wellfare state they have very little state intrusion into their industries other than taxation. I don’t know if I’d agree with him on the first half but certainly the nordic tendency to not overregulate their businesses may be something to emulate.Report
I’m happy to see someone beside myself making that second point here for once!
I can’t imagine many things that would do more to exacerbate economic inequality than, say, out of control licensing laws and over-regulation that is easy for large companies to comply with but almost impossible for small companies to comply with.Report
Wal*Mart is foresquare behind current health care reform proposals, by the way. Especially the employer mandate. Surely this is simply corporate egalitarianism and has nothing to do with what Mark and North are talking about.Report
What is more important – income inequality (or equality), or an acceptable standard of living across the board? If we could achieve an acceptable level of income and standard of living across the board, but that led to higher income inequality, would that be acceptable?Report
My take is that high income inequality will usually make it difficult if not impossible for everybody to have an acceptable standard of living. To have high income inequality there need to be policies that favor the rich over everybody else and over public spending that benefits everyone. Also high inequality leads to and is a product of a very small number of people having a disproportionate influence on government.Report
Haven’t we established that economics isn’t zero sum? I mean I don’t even like the Gipper or Reagonomics but a rising tide does lift all boats.Report
economics isn’t a zero sum game, but the rising tide analogy is faulty. Under W we saw a rising tide that left many americans behind. For many their income adjusted for inflation went down while the stock market, gdp, productivity, etc rose steadily. This rising tide lifted only the yachts, and not the paddle boats.Report
Well heck, I hated W as much as anyone. But I’m deeply skeptical of the practicality of going after income inequality in order to help the poor. How about we help the poor in order to help the poor instead?Report
how about we help the poor by taxing the super wealthy who pay a lower percentage of their income in taxes than we do?Report
My point is that if we’re going to help the poor, focus on helping the poor. If that increases economic equality that’s nice. But economic equality should be a side effect of a better lot for the poor. Not a goal.Report
*applause*Report
I have two issues with your statement. First, you’re assuming these things are independent, I’m not sure that they are. Second, you imply that helping the poor will lead to less economic inequality. I don’t really understand this because it seems to contradict your view that they are independent.
To avoid confusion it’s best to be specific. The very top of the economic ladder pay a lower percentage of their income in taxes than you and I. I propose we help the poor by bringing this percentage up to what it is for the uppoer middle class and using that money to help the poor. What do you think?Report
Token Liberal, I do not think that inequality and poverty in the poor are as tightly correlated as you do. I don’t think inequality is the cause of poverty. Trying to help the poor by fighting inequality seems backwards to me. Why not help the poor by helping the poor?
To answer your specific question; I don’t have a problem with that proposal specifically so long as that is all that happens when we raise the tax on the upper class.
Now to offer a question of my own; suppose the standard of living in the US ascends for all. Suppose that now the bottom rung of our social ladder are people who have homes, food, education, basic health care and access to transportation. Suppose that the wealthy in our society are now fabulously wealthy; blasting off for their orbital summer houses in rocket cars or some such. Given that the “poor” in this society are now objectively not distressed is there some reason that we should continue to attempt to eliminate inequality?Report
I wouldn’t have a problem with your scenario, but I think it’s pie in the sky. Let me weave all of these things together real fast.
“I don’t think inequality is the cause of poverty”
I never said such a thing. I said that I believe they are related, which is a very different statement. Now let me give some evidence for this belief. Under George W, post 9/11, GDP rose, productivity rose, the stock market rose … yet the lower half of american society lost income and buying power over that same period in which the economy grew. Where did the benefits of this growth go? To those at the top, increasing inequality.
Isn’t this strong evidence that the two are related? That a rising economy can, and did, leave many americans behind? And it did so because the benefits of the rising economy was unequally funneled to those that already had the most.Report
I’ll roll out the old cliche now. Correlation is not causation. I won’t argue that inequality and poverty are connected. But trying to fight poverty by going after inequality seems backwards to me. Why not fight poverty directly? We might well bring the rich down by fighting inequality but I see not reason to believe that just because people are more equal that suddenly the poor won’t be poor. One thing the last century taught us is that it’s near impossible to make everyone in a country rich but it’s all too easy to make everyone in a country poor.Report
I would say that there’s a correlation there between income equality and standard of living. The nature of income inequality is that it leaves many service providers in the economy captive to the whims of high wage earners who fuel their particular industry. That is, more work is tied up into luxuries which are then made easily disposable when there are periodic downturns. The workers in such sectors will tend to be in the lower rungs of the economic spectrum and on the whole create economic insecurity. Insecurity in turn leads to a lower standard of living in general, but particularly so in a country like the US where the vast majority of jobs are now tied to services and where essential standard of life issues such as health insurance, credit and even admission to higher education are centered around stable employment.
Lower income inequality leads to shifting the consumption burden around society and leaves it less sensitive to shifts for the investor class, which is a good thing. There’s certainly truth to the fact that the high growth in income inequality in the 1920s helped fuel the depression by driving luxury consumption into the ditch, given that as an industry it was employing a fairly large number of people, leading to the downward turn in the production cycle.Report
That’s an interesting position Nob. Have there been any studies that actually correlate income inequality with economic insecurity?
I wouldn’t be surprised if it’s true vis as vis America vs W. Europe but I remain unconvinced that the European model is desirable to emulate. Do we really want to have unemployment that remains high regardless of economic swings and have half of the Country’s workforce dedicated to government jobs?Report
“Acceptable” is a relative term that gets updated as technology improves.
Does an acceptable standard of living include:
A television?
A computer?
A cell phone?
It’s weird how, 20 years ago, there would have only been debate over whether televisions are part of an acceptable standard of living.
Indeed, Tupac spat the memorable line “they get jealous when they see you with your mobile phone” which seems such a quaint sentiment today. If the song were to be updated, they’d have to update it to “fly iPhone” or something that had similar flow. (I don’t know what the current adjectives are.)
Things that used to be luxuries become commonplace at which point “acceptable standard of living” includes the question of whether access to the internet is part of it.Report
And the same applies for income inequality doesn’t it?Report
Word.Report
Sorry Jay, I forgot to add on that I knew you would raise that point. Yes acceptable changes, so what. I’m serious, of course context changes perception, so what. Who is talking about consumer goods? In terms of this discussion we are talking about income equality and income. People can buy whatever they want. But who and who doesn’t do well under a particular system is the issue. We have a system where the rich are favored over everybody else. Why is that good?Report
Well, it seems that we’re talking about “acceptable standard of living” as if it were an objective, measurable thing.
When, at the end of the day, it seems to be something that is exceptionally subjective… even something based on “feelings”. It seems odd to me that I have a responsibility to make certain that people have certain emotional responses to their circumstances.Report
Great nobody wants you to care about others peoples emotional responses. But this is about how our society is structured and our govs policies. Certain policies privilege some people and other polices don’t. the question is what kind of policies does our gov have. Not what kind of questions can be used to avoid addressing the question.Report
The policies will be based upon intangibles such as “feelings”.
Saying “we’re talking about *POLICY*, not emotional states!!!” fails to appreciate that we’re talking about policies based on, yes, emotional states.
The “acceptable level of standard of living” is based on subjective measurements. The stuff you say “this is what everyone ought to have” today will be seen as spartan tomorrow. The day after that, it’ll be seen as something only a Republican could possibly wish on the poor.Report
Of course there are intangibles involved. Unfortunately we’re human not Vulcan’s. Again so what. Justice, fairness, right and wrong are based on our beliefs and feelings.
There are plenty of objective data we can look at. Median incomes, ratios of inequality, there is plenty of hard economic data.
This isn’t about consumer stuff.
It’s easy to keep throwing out question Jay. But there is no natural or value/intangible free policy. There are only the choices we make as people about how our gov should be. Your beliefs are just as much about feelings and beliefs as mine. That doesn’t get us out of making choices.Report
Well, let’s say that I said that “everyone ought to have the following:” and put together a list.
That list could have stuff like “shelter from the elements” and “fresh water” and “a septic system” and down the line.
I’m pretty sure that my list would be chock full of stuff that would get you to say “yes, yes, of course, yes, yes” as you read down it without a single “no” on your part.
The difference is that you will get to the end of my list and say “that’s it?” and I suspect that I would read your list and snort at entry number 31 as being completely a luxury item and item number 48 as something that I enjoy but, hey, I pay for it out of my own pocket none of this “entitlement” crap and 53 would make me say “I’m still reading stuff on the list!!!”Report
I’m not trying to be a PITA, but, yes of course. So what? Of course people disagree on things, how does that enter into this argument about income inequality and whether it is good or bad or whatever. It feels like you are just avoiding the post and the question by raising fairly banal observations that people will disagree on things. Well people will disagree but that doesn’t mean we all sit in a circle and stare at each other. that doesn’t mean we don’t have decisions to make as a people.Report
Discussion of matters of taste as if they were matters of morality will always result in people staring at each other. I’d sort of prefer it established that we are, in fact, discussing a matter of morality before we start making moral judgments about how we haven’t made more decisions on behalf of others.Report
My personal answer E.D. is that equality doesn’t matter a damn if living standards over all are rising for everybody. I don’t see any profit for us Liberals in sipping too deeply from the politics of envy. It would end in grief.Report
Living standards aren’t rising for everybody. Median income has not risen while the rich have seen their incomes skyrocket. If everybody was doing well then it wouldn’t be an issue.Report
Okay Greg. So lets focus on -why- median income has not risen. The answer is not that the wealthy ran off with it. There’s not enough wealthy to pocket the money that a national increase in median income of 1% would amount to. Lets talk about fixing the problem rather than complaining that some have more than others. Some always will. Under any system.Report
Well how do you know the wealthy haven’t run off with it? that’s a serious question. The wealthy have seen their incomes and wealth rise astronomically while the rest haven’t. this isn’t a matter of blaming the rich as it is a matter of looking at who our polices favor. Massive tax cuts for the rich probably do have something to do with it. I would also guess the lose of good middle class jobs to the weakening of unions and loss of jobs to other countries is part of the problem.Report
In answer to your first question Greg it is a matter of math. If the wealthy had absconded with the amount of money we’re talking about here they’d be a hundred times more wealthy than they are right now.Report
I would say that both are important. There’s a number of reasons why income inequality is bad. One is that it’s not based on productivity or meritocracy: the people who make the most, by and large, contribute the least to society (AIG… Lehman Bros… Goldman Sachs… most of the people on Wall Street…) and make their money off of people who actually do useful things. Another is that income inequality is harmful to democracy by its very existence – the fact that the aforementioned groups have so much money gives them far more influence over the government than the average person has, so the government acts in their interests. The existence of a small but astronomically rich group of people undermines the idea of democracy. Finally, there is the important fact that there are a lot of people who don’t have an acceptable standard of living, and I don’t see that as changing within my lifetime, so your question is kind of moot. It’s something you say to make a theoretical argument, but is irrelevant to life as it exists.Report
One is that it’s not based on productivity or meritocracy: the people who make the most, by and large, contribute the least to society (AIG… Lehman Bros… Goldman Sachs… most of the people on Wall Street…) and make their money off of people who actually do useful things.
I worked at Goldman for three years. Are you questioning my contributions to “society”?
This ought to be fun.Report
Off Dave…
“the people who make the most, by and large, contribute the least to society” I hear this rather often and – I just – I get it emotionally but I don’t see how when given a second thought it holds up.
I mean who determines what’s useful and how to measure contributions to society? I mean isn’t that the kind of external valuation that people (particularly on the left) chaff against.
The people I know in finance make absurd amounts of money (relative to me and really everyone else) but they also work absurd amounts of hours. They’re giving up things that other people aren’t. Moreover, another group of the absurdly wealthy are film and television producers and actors. What kind of price are you willing to put on their cultural/useful contributions?
The income inequality between union presidents and the workers they represent is quite large, any words on how we should reduce that?
I think just because someone’s contributions aren’t obvious or they aren’t doing manual labor for 7.5 hours a day, doesn’t mean they aren’t working. It doesn’t mean they aren’t sacrificing other things. It doesn’t mean they aren’t contributing useful things to society.Report
“…the people who make the most, by and large, contribute the least to society (AIG… Lehman Bros… Goldman Sachs… most of the people on Wall Street…) and make their money off of people who actually do useful things.”
Really? What is the definition of ‘contribution’? Is it sweat, profits, or something else?Report
I just recoil from Ross Douthat lecturing liberals on what our priorities should be. I don’t lecture him on how he should balance his time between saying that sex is icky and complaining about affirmative action.Report
The bottom 40 percent of Americans pay no federal income tax. For the system to not be progressive, by definition, the top one percent would have to be paying zero. Instead, they pay 31 percent. It might not be as progressive as you like, but it’s progressive.
As for “conservative enthusiasm for massive tax cuts/giveaways for wealthy Americans,” last I checked, there were no provisions in the Constitution giving legislative authority base on enthusiasm. Democrats control the House, the Senate and the White House. If Nancy Pelosi and Barack Obama want to pass a continuous marginal tax, I am not aware that Glenn Beck and the Heritage Foundation are authorized to veto it.Report
The bottom 40 percent pay payroll taxes, and as those are capped, they pay a higher portion of their income on them than those at the top.
As for “conservative enthusiasm for massive tax cuts/giveaways for wealthy Americans,” last I checked, there were no provisions in the Constitution giving legislative authority base on enthusiasm. Democrats control the House, the Senate and the White House. If Nancy Pelosi and Barack Obama want to pass a continuous marginal tax, I am not aware that Glenn Beck and the Heritage Foundation are authorized to veto it.
True. Just, you know, meaningless.Report
If the top earners pay a smaller percentage of their income than middle class earners, well that isn’t a progressive tax system.
“A progressive tax is a tax by which the tax rate increases as the taxable amount increases.”Report
Does this take into account local and state taxes? I know in some cities, once you add that in, the top income earners are paying waaaaay more in taxes.Report
so what you’re saying is that the federal income tax isn’t progressive, but once you add in state taxes the aggregate is progressive? Is this across all states, only a tiny fraction of states, no states, or somewhere in the middle? Can you give some specific examples?
The federal tax system is not progressive, and I’m open to facts about state and local taxes.Report
In dollars? Yeah, they pay more in total dollars in payroll taxes than anyone making less than the payroll tax cap. (As of 2004, it was less than $90,000.) As a percentage of income? Much, much less, because, again, it’s capped.Report
Re: Point #3:
So your contention is that income inequality is a result of the government not taxing the rich enough? What about the very real impact that global labor has on low and unskilled American workers? Not to mention the influx of unskilled immigrant labor which drives down wages. You’re ignoring one of the key points in Douthat’s essay.Report
I agree with you Mike on the unskilled labor part. So would you agree that the best solution to that problem would be a program that offers significant rewards (both in terms of money and citizenship) to illegal immigrants for turning in their illegal employers coupled with a program of severe penalties on employers who knowingly employ illegal immigrants to circumvent labor laws?Report
Hey, now there’s a good suggestion!Report
Thanks Katherine. I don’t know about Mike specifically but it’s fascinating to watch the right wing in general sputter when you drop that suggestion into an article about illegal immigration.Report
I don’t know why we would reward illegals for turning in their employers, but I’m fine with severe penalties for employing them. I favor deportations for illegals and a guest worker program so they can come back in legally. I also favor tarrifs on unskilled immigrants and any enticements we can come up with for skilled labor.Report
We would reward illegals, Mike, because A) it would help us catch the illegal employers who are truely the source of the problem and B) impose a respect for the law on a group of people who (unlike illegals) have something to loose from being cause.
Illegal gets caught in the states. Gets deported to Mexico. Cries into his beer. Goes out and starts hiking north again. Illegal employer gets caught employing illegal immigrants. Gets fined into the ground and ends up selling Mary Kay subscriptions door to door. His buddies who also employ illegals suddenly realize that illegal employees have downsides. Suddenly illegal employees aren’t just helpless exploitable saps on the work floor; each one is a potential bomb under their financial security. Market for illegal labor contracts sharply. Illegal immigration declines.Report
Again, I’m fine with nailing the employers, but giving the illegal employees a reward is ridiculous. That could turn into a cottage industry on its own.Report
It’s not ridiculous, it’s the ideal means of catching illegal employers. (And also an ideal way of making illegal immigrants less desirable as employees) As for a cottage industry, I am dubious. We’re a sophisticated enough bunch to differentiate between someone hiring an accidentally illegal immigrant to clean their garage and someone knowingly hiring two hundred of them to pick tomatoes for fifteen cents an hour.
I will conceed that it’s certainly more effective (though less appealing to the masses on the right) than zooming around in the desert on ATV’s looking for some immigrants to chase. And of course the corporate paymasters of the right would get the vapors at the very thought of people who actually have something to loose being punished for flouting the law.Report
If the government got serious about enforcement do you think making illegals the whistleblowers would lead to any more fines / punishments that without using their help?Report
Yes I do. I also submit that using their help would be the most cost effective and efficient way of “getting serious about enforcement” and at the cost of what? A sliding scale of rewards and a faster line at immigration in exchange for pretty much destroying the black market in illegal labor? It’d be a steal.Report
I have to admit I was a bit dubious. My first thought was cash rewards for government jobs = bounty hunters = :/
But, increasingly, I think I’m on board…and I think it wouldn’t be that hard to design in a few checks to prevent abuse.Report
After thinking this through a bit while composing a reply to you, I think I actually see the beauty of your plan. Essentially what you would create is potential timebombs in each ilegal immigrant. Potential employers would never know if they were hiring an illegal who was going to rat them out for a green card. I can see where that might end illegal hiring.Report
Yes Mike I appreciate you being open minded about it. Consider also that the system isn’t just putting pressure on the employers not to employ illegal’s. It’s also putting pressure on other illegals -to- turn the employer in. The illegal employees are suddenly in a prisoner’s dilemma; for the illegal employee who turns in his employer there is the reward which in theory should scale with the size of the operation so exposed. For the employee who stays mum there’s a brisk deportation back to their home country just like now as soon as one of their co-workers exposes them. And I agree with Kyle that it could be designed to prevent the bounty hunting/cottage industry farming which you fear. A minor fine for the employer and a minor reward for employee turning in the day laborer you hired to paint your fence. Citizenship and a nice chunk of change in a voucher form perhaps for the immigrant who exposes a hundred illegal employee meat packing scheme and of course the fine on the illegal employer will be something he’ll feel (and most importantly something he can pay because he, unlike the immigrant, has something to loose).Report
Two internet commentators swayed to someone’s opinion AND admitting to it in one day. That’s got to be some kind of record!Report
If any credit is due it’s to you both for being willing to consider the thought experiment.Report
My original comment addressed the payroll taxes issue, but the system ate it. This response was also more biting and entertaining, but the system at that, too.
I see this as a huge tax on my rhetorical impact. Freaking liberal commenting system! I blame ACORN.Report
I think the 17% figure would seem to support, rather than hurt, Douthat’s argument, which I take to be that tax rates, in and of themselves, are not a particularly effective means of reducing inequality. If the income tax code calls for progressive taxation (and it certainly does) but does not actually result in terribly progressive taxation, then this is a sign that the wealthy are very, very good at tax avoidance such that progressive tax rates do not seem to make all that much of a difference. Not surprisingly, there is indeed an entire industry dedicated entirely to exactly that purpose.
That’s not to say that the tax code can’t be used to reduce income inequality (assuming for purposes of this argument that income inequality is problematic in and of itself) – just that tax rates aren’t the way to do that. Instead, you’d need to simplify the tax code and get rid of all sorts of deductions and tax shelters. Naturally, many of these deductions are quite popular and not going away anytime soon – the charitable giving deduction and the homeowners’ interest deduction being the two most obvious examples.
Put another way – if as you say the existing progressive income tax system has failed to reduce inequality even at the margins, then why would we expect making that system more progressive to reduce inequality more than at the margins?
Of course, there may well be other justifications for higher tax rates on the rich; it’s just that reducing inequality doesn’t seem to be one of them.Report
I think the 17% figure would seem to support, rather than hurt, Douthat’s argument, which I take to be that tax rates, in and of themselves, are not a particularly effective means of reducing inequality. If the income tax code calls for progressive taxation (and it certainly does) but does not actually result in terribly progressive taxation, then this is a sign that the wealthy are very, very good at tax avoidance such that progressive tax rates do not seem to make all that much of a difference.
Or it suggests that it’s because corporate and capital gains taxes are low and that’s where the rich get most of their moneyReport
The long-term investment capital gains tax discrepancy may well be part of it, although I’d classify that in the same category as tax simplification. When we talk about increases in the capital gains tax, we’re usually talking about relatively small increases since a complete elimination of the differential rates is politically out of the question.
However, the idea of corporate taxes being too low doesn’t seem to hold much water since the US’ corporate tax rate is the second-highest in the industrialized world behind only Japan, and barely at that. True, the effective corporate tax rate is substantially lower than the nominal rate, but even if you take the effective tax rate, the US winds up above the OECD mean. Moreover, the discrepancy between nominal and effective tax rates is again an argument for simplification of the tax code rather than for an increase in nominal rates.
But even if it were true that corporate taxes were abnormally low in the US, they wouldn’t at all explain the discrepancy between nominal and effective tax rates in individuals. First, the effective corporate tax rate is substantially higher (minimum 25%) than the effective individual tax rate for the top earners (17%). Second, corporate taxes are paid by the coporations on money that is by definition retained by the corporation; to the extent it is distributed to shareholders thereafter, it is taxed again as either regular income or capital gains.Report
My point was that if the tax code isn’t actually that progressive, then it can’t be the case that higher taxes don’t work, because they haven’t really been tried. And so, I guess my answer to your question is that we have only a nominally progressive system, and part of the answer to reducing inequality must be to have a genuinely progressive tax code, at all levels of government. If that doesn’t work, then well maybe Douthat has a point.
On the whole though, I agree that raising rates isn’t the only answer to using the tax code as an engine for reducing inequality, but I do think that it is a necessary part of the solution (since the revenue raised would be used for egalitarian spending!).Report
“since the revenue raised would be used for egalitarian spending!”
egalitarian spending on…the F22? or the people/systems required for tax collection. In theory, not a bad idea. In practice/all likelihood, aren’t we more likely to get another cash for clunkers or some bridges and roads to Alaska/West Virginia/the PA-12th than effective housing programs?Report
Well said, Jamelle!Report
Thanks!Report
Don’t blame me, I voted for Joshua Trevino.Report
“I do think that it is a necessary part of the solution (since the revenue raised would be used for egalitarian spending!).” I see Yglesias making the latter part of this argument all the time. But he seems comfrotable with (or at least accepting of) the idea that to do this, we might actually have to make taxation somewhat less progressive. Specifically, soaking the rich is not going to raise enough revenue to finance healthcare reform. So basically, we are going to have to soak the middle class, too. And since even that might not be enough, Yglesias has been pretty enthusiastic about sin taxes which he admits are pretty regressive, at least on the revenue side. Like you, he says the spending will help reduce inequality. But he seems less sanguine about doing this in “progressive” fashion.
I guess a cynical version of this is: “Poor people need healthcare. We can’t make rich people pay for all of it. And since poor people do a lot of stupid things like smoke and eat Twinkies, it would be useful to take a chunk of money away from them and spend it on something we think will make them happier.” All of which makes sense. It just strikes me as more paternalistic than progressive.Report
I read ygelasis and have never seen him advocate soaking everybody. never.Report
What I said was:
“Yglesias has been pretty enthusiastic about sin taxes which he admits are pretty regressive, at least on the revenue side. Like you, he says the spending will help reduce inequality. But he seems less sanguine about doing this in ‘progressive’ fashion.”
If you bother to look, you can find plenty of examples of this discussion on his blog. This, for intance, it took me all of three seconds to dig up:
http://yglesias.thinkprogress.org/archives/2009/07/the-impact-of-soda-taxes.php
If you care to read it, note this part:
“The tax would be somewhat regressive, but if it was used to finance Medicaid expansion and subsidies for health insurance that would more than offset the impact. ”
That is, Yglesias thinks that sin taxes are good, primarily, because they raise revenue. And he supports them despite admitting that they are regressive. Which is… um… exactly what I said.Report
it was the soaking the rich and middle class i said i had never seen.Report
OK. What I said in that regard was: “[Yglesias] seems comfrotable with (or at least accepting of) the idea that to do this, we might actually have to make taxation somewhat less progressive. Specifically, soaking the rich is not going to raise enough revenue to finance healthcare reform. So basically, we are going to have to soak the middle class, too. ”
Here is a recent article he published in the American Prospect:
http://prospect.org/cs/articles?article=the_next_tax_revolt
Samples:
“Progressive taxation is an important principle. But the idea that further changes to the tax code should exclusively target the wealthy is ultimately counterproductive. ”
“… it becomes clear that the necessary revenue cannot be found exclusively through efforts to soak the rich.”
” While the United States as a whole is lightly taxed compared to other developed countries, our wealthiest citizens are already paying a pretty high share of the tab.”
“Higher taxes on the rich are arguably more egalitarian, but they can only raise a limited amount of revenue. ”
“But as a political matter, a candidate pushing such an agenda can’t tour the country promising that 95 percent of the population will see lower taxes. ”
“The United States already does about as much as any other country to curb inequality through the tax code.”
“If you care about inequality, in other words, the thing to focus on is not soaking the rich through the tax code but rather ensuring that there’s enough tax revenue to finance generous public services. ”
Do I need to go on?Report
Perhaps worth noting that Yglesias addresses the paternalism charge in the prospect piece. He doesn’t even bother denying it. He admits that sin taxes are regressive. He admits that to pay for the progressive agenda, we will have to raise taxes on the middle class. And he admits that there is an element of paternalism to this agenda.
Which, again, is exactly what I said. I fail to see how I misreprsented his position, or how you could have been unaware of these positions if, as you say, you regularly read his blog.Report