24 thoughts on “Kaus Versus Krugman”

  1. We may dissect the numbers any way you want. Discussing effective rates and claiming people will evade taxes is disingenuous. Regardless of the rate if people can avoid paying for something, they will try their damnedest not to pay. The truth is the tax rates and effective taxation were higher in the so called golden age of the 50s than they are now. They were also higher when Clinton was President.

    Perhaps you should watch the Clinton/Bush/Perot debate back before Clinton was elected for his first term. You can find it in Youtube. Bush the Elder was proposing lowering taxes for the rich and preaching trickle down economics and he lost for rather obvious reasons. The economy was in the dumps back then and it is in the dumps right now. The Republicans had over a decade to fix it using whichever method they wanted and they failed. What they did was increase US debt to gargantuan levels and depress the economy by dragging a chainball of defense expenditures around its neck.

    You Republican apologists claim this is a coincidence but it is not. These kinds of policies simply do not work especially when the economy is in a transition. In the early 90s it was the end of the Cold War and now it is the hangover of globalization and the capital flight towards the emerging economies of the BRIC nations. At least the money that is taxed has a better chance of staying in the US than it would otherwise. Just look at Romney’s investments (Gazprom, Yandex, Volkswagen, Toyota, Adidas) as an example. Next time you see a jerkass claiming he is moving to Singapore to be closer to his Chinese investments reconsider if these are the sorts of people you want to give more capital to blow around.
    Unless the US reconverts its industry and the US government gives incentives for corporations hiring people and whole new businesses there is little chance the current situation will improve. Tesla and SpaceX are being recipients of this but there are others. Of course there are some failures. Failures are common in startups. Ask any VC. Some people will whine about it, e.g. the government is picking winners and losers, but the same happened back when IBM was building the S/360 mainframe series with US government funding, where the IRS was a major user, while a lot of people in business were whining they didn’t want to do business with the government anymore. Heck I still remember reading about it. In the end IBM built a great product that is still being used today. The same will happen again. The losers whine and the rest will push the envelope further.

    1. How will the government give companies incentives to hire people when its intent it to make sure companies loses money on every worker hired, and that any money some of them do make is seized by the government? Why do you think capital investments and plant expansions have plummeted?

    2. Pretending that there is no connection between higher marginal tax rates and the propensity of those affected by those rates to spend resources to avoid them is the sort of nonsense that I have becomed accustomed to seeing from the left, but this is a particuarly egregious example. You pretend that ‘the rich’ will always avoid higher taxes as if there are no costs associated with them doing so, and then wave away any connection between higher rates and tax avoidance as a result. This is precisely what Kaus dissected when Krugman tried to do it, and you are certainly no Krugman.

      Tax rates were higher when Clinton was president…spending was a LOT lower as well. Tell you what, I will take the higher tax rates, will you take the lower spending? The GOP was certainly complicit in higher spending in the early 2000s, and nobody here denies that. What they DO deny is that this represents anything even close to what the Dems would have done if the GOP hadn’t had some control during that period. All you need to do to see this is take a long hard look at what the Dems did when they had absolute control of congress from 2007 through 2010, or do you really want to pretend that the GOP somehow managed to be running the show then too?

      Raising tax rates domestically in order to fund higher spending (and lets be honest, that is precisely what the Dems want to do….they haven’t been willing to address any serious spending reform proposals whatsoever) isn’t going to help anyone other than the state schtuppers and their various hangers-on. Combining overweening spending with a toxic regulatory environment (Lisa Jackson’s EPA seems to be right out of Atlas Shrugged at times) seems almost a perfect approach to driving business out of the country, and capturing a bit of that through higher taxes (and not much of that…do you really suggest that the IRS is any match for the legal and accounting talent that the wealthy can afford to deploy?) shows more about your own ignorance than any realistic plan for the future. Higher taxes eviscerate the middle class, not the upper class that can afford to shelter than income and move around the governments grabs. Pointing out that Romney found ways to prosper on makes my point, not at all yours.

      Funny you mention Tesla and SpaceX, both of which owe their existence to zillionaires who grew in large unregulated and low-tax environments. Compare this to Solyndra, etc., which are perfect examples of crony capitalism run amok, feeding off of the corruption of the current administration. That the government isn’t always wrong (and I would suggest that IBM, which made a decades long practice of dstroying competition through any number of shady practices and collapsed almighty fast when exposed to competition that they couldn’t ‘fix’ out of existence illustrates the weakness of your position better than anything else) doesn’t prove very much, and in fact begs the question. Even if the wise solons on the Potomac could actually pick winners effectively, and not simply reward their friends in an almost Bastatian fashion by breaking a few windows, would we really want that practice to take root?

      Finally, as for ‘the jerkwads’ you mention…they seem to me to be the folks that don’t want to genuflect to the parasites in the government, and who have the resources to do something about it. If you don’t like them referring to you and your ilk as what you are, get used to it…you will get to see a whole lot more of it as time goes on…

      1. “Trickle down economics”–like “neo-con” a phrase that usually signifies “No real thinking going on here.”

    3. “The Republicans had over a decade to fix it using whichever method they wanted and they failed. “

      Say WHAT? Well, maybe you didn’t read this right wing rag back in the day:

      “…the seven year period from 1982 to 1989 was the greatest, consistent burst of economic activity ever seen in the U.S. In fact, it was the greatest economic expansion the world has ever seen – in any country, at any time.”

      1. seven year period from 1982 to 1989

        Black Monday, S&L crisis, just blips on your radar I see.

        In fact, it was the greatest economic expansion the world has ever seen – in any country, at any time.

        Laughable. If he had said Meiji Japan or XIXth century Germany I would agree. This is the period where US companies kept bankrupting themselves over and over and the US was fearing losing the economic race to Japan. RCA was broken into pieces. Sony bought Columbia Pictures. He talks about unemployment going down. That is fine. However he says zilch about middle class income. I am certain the military contractors had a lot of business back then. However the industrial sector was going down the tubes and it takes a really lousy memory not to remember how things were. Sure you can create jobs in make work programs by just spending money on weapons.
        Oh and unemployment was lower in the late 90s when Clinton was President. He also managed to reduce the debt instead of increasing it.

        1. They were just blips on the radar, thanks to enlightened economic policies. There are always crises. The popping of the dot-com bubble (thanks, Pres. Clinton!) destroyed fully half as much paper wealth as the recent mortgage crisis. But, that turned into just a blip thanks to the Bush administration’s economic stewardship, while the fallout from the mortgage crisis lingers on, and on, and on.

          Clinton was handed an economy with a peace dividend, and the entry of the paradigm shifting technology of the internet into the marketplace, these benefits having been enabled by his predecessors successful policies for wealth creation and national security. In just 8 short years, he squandered it all, diddling interns while leaving an economy teetering on the brink of disaster, and a dedicated terror movement ready to strike in the heart of our territory, which they did forthwith. Thank God the adults were in charge when the chickens came home to roost.

  2. It’s all BS. The reason the tax code is as complicated as it is, is because they like BS. There is no reason it could not be a whole lot simpler. We start with a clean sheet. Assume we can’t for some reason make the switch from an income tax to a sales tax.

    0) There are no loopholes. No deductions. We get rid of all entitlement programs. We limit the federal government’s ability to buy favors.

    1) We pick a flat rate that applies to everybody (30%?) on all income regardless of source. Everybody has skin in the game. There are no brackets or inflection points.

    ObamaCare must go.

    2) Every taxpayer (even ‘the rich’) gets a check each month ($2000?) This makes it progressive. Somebody making $3000 per month gets $1100 net; Those making $10k/mo. pay $1000.

    3) We argue about the proper amount of 1) and 2) but they can change no more than 1% per year so business can reliably plan for the future.

    We can get rid of food stamps, unemployment insurance and all the bureaucracy that goes with it. Those unemployed government workers can collect their $2000 while figuring out how to get real jobs.

    1. Ken,

      I would vote for such a tax. You probably could get by with a 25% rate and $1000 a month, meaning everyone $48,000 income a year a break even point where withholding equals the monthly check the tax payer receives.

      I would also eliminate the difference between capital gains and regular income, it also distorts the market.

        1. No, I am someone who actually believes in Free Markets and personal freedom, unlike you and many on this blog who seem to think economic freedom only applies to their pocketbooks.

          For example most folks here don’t seem to believe in free immigration and want to see “illegal” immigrates deported even though their idol Ayn Rand was one. Workers crossing borders are simply another form of free trade – just another resource flowing to markets where the highest price is paid for it. Unless the government distorts those markets by attempting to block it.

          Most folks here seem to want individuals to give up their First Amendment Rights in order to keep their job and turn over their votes to their “wiser” employers as long as its not applied to them. (What would you think about an employer firing someone just for going to a Tea Party rally?)

          Most folks here want to toss the First Amendment out of schools as well so teachers are only allowed to teach what the folks here “believe” to be the “truth”.

          Most folks here are also not willing to accept the results of free elections instead arguing voters were too stupid to know what they were voting for… Or voted for their self-interest, which is even funnier since the entire basis of free market economies are individuals making decisions based on their own self interest.

          Most folks here also rant against the government picking winners and losers in the economy and yet praise NASA for picking winners and losers in the commercial HSF market with COTS/”Commercial Crew”.

          I could go on, but I think you need to read some definitions of libertarianism. Its a bit more than “keep my taxes low” or “protect my pocketbook”.

    2. A flat rate certainly. I’d argue for no higher than 20%. As for the prebate portion, that’s a little too redistributionist for my taste, and would be abuseable at too high a rate. But the outline presented would still be a vast improvement over the current tax code. I could live on $2000/month fairly easily. At $1000/month I’d have to hunt for a residence that didn’t gulp most of it, but I could live on that in some areas.
      Eliminating capitol gains as a separate income category would also be good. The tax code also needs to be reformed so that corporate income isn’t double taxed, first as corporate income then as individual income/capitol gains when distributed to shareholders.

      1. a little too redistributionist

        Exactly the debate this proposal gets out in the open. That’s the point, we change the tax code from who do we redistribute to, to what are the proper values of these two numbers.

        That is entirely the point and look how it’s been picked up on right here in comments.

  3. Most folks here seem to want individuals to give up their First Amendment Rights in order to keep their job and turn over their votes to their “wiser” employers as long as its not applied to them.

    What profound ignorance of the Constitution. No one has a “First Amendment right” to say whatever they want without fear of consequence.

    And no one is proposing that anyone “turn over their vote” to anyone else. It’s stupid to think that a simple description of the consequences of a vote is a “threat” or that the employer will know how the employee voted.

    (What would you think about an employer firing someone just for going to a Tea Party rally?)

    I think that it would be a stupid thing to do, but it’s certainly within their rights.

    1. Rand,

      You need to learn how to read better. I didn’t state it is the law, merely that it should be seen as a right under the First Amendment.

      If you really understood what the Constitution is you would know that the rights it grants are constantly being expanded by courts. There hasn’t been many test cases on employee’s political rights because until recently employers respected them. In fact, that last time it was a issue was in the South during Reconstruction when White plantation owners used the threat of economic retaliation to influence how their black workers voted. Don’t be surprised to see some new test cases to come out of this election.

      Remember at one time it was considered legal for employers to discriminate based on race, gender, national origins and religion. Political freedom will likely be added to the list in the future as employers increasingly show bad judgement in mixing business and politics.

      1. If you really understood what the Constitution is you would know that the rights it grants are constantly being expanded by courts.

        If you really understood the Constitution, you would know that it doesn’t grant rights.

  4. You need to learn how to read better. I didn’t state it is the law, merely that it should be seen as a right under the First Amendment.

    Nonsense. It would only be seen as that by someone ignorant of both the meaning and intent of the amendment. It is a constraint on the government, not on employers.

    1. Actually, I think Thomas has a good point. If employers couldn’t hire based on political beliefs, conservatives could apply for jobs at left-wing charities and universities – and then sue them out of existence. 🙂

    2. Rand,

      You still don’t understand what I am saying. Not surprising as you probably are unfamiliar with HRM. Maybe this will help.


      [[[Unlike public employers, however, private employers have felt free to discipline or fire these employees. Private employers, after all, are not constrained by the First Amendment and need not recognize anyone’s freedom of speech. Moreover, private employers in most states and in most circumstances employ their employees at will, meaning the employers’ management decisions cannot be challenged unless those decisions discriminate against an employee because of the employee’s age, gender or other protected characteristic.

      Suddenly, however, the discretion private employers have enjoyed is diminishing. As Lafe E. Solomon, acting general counsel for the National Labor Relations Board, explained in a report released on Aug. 18, the NLRB now maintains that the National Labor Relations Act protects some employee social-media activity. As a result, private employees now have more freedom of speech than their government counterparts.]]]


      [[[In the report, Solomon detailed the board’s handling of 14 cases in which unfair labor practice charges arose out of social-media postings or policies. In half of those cases, the board found that the employers had violated the NLRA; in the other half, the board found the employers’ actions were lawful. ]]]

      Basically the principles of free speech are slowly being extended to private employees, one case at a time by the NLRB using the NLRA. It will be interesting to see if this election accelerates it.

      1. Of course I understand what you’re saying. That doesn’t make it non-nonsense. This is not an expansion of rights — it is a constraint of them, and it has nothing to do with the First Amendment.

          1. What an odious comparison.

            Next, you’ll be calling me a racist in 1…2…3…

            I guess you have no idea to what depth of argumental depravity you’ve descended, in your hatred of actual freedom, and real rights.

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