4 ms·

Opinion – The Economics of Soaking the Rich

2 points by colinprince 8y ago

nabla9 8y ago
Recall the difference between marginal tax rate and tax rate. 90% marginal income tax rate is not the same as 90% income tax rate. It seems that the failure to recognize the difference creates lots of unnecessary confusion in the social media comments. Especially among the first comments.
- sharemywin 8y ago
  Sorry, I couldn't help my self. Technically around $2B the difference between a tax rate of 90% and a marginal tax rate of 90% becomes a rounding error. Assuming the last tier is $10M.
  - nabla9 8y ago
    Good data point. Although there are no individuals with $2B yearly income, It would be good idea to put same the upper limit for the __effective__ marginal tax rate in every income bracket. Poor people can have very high effective marginal tax rates. > To put it another way, the effective marginal tax rate when a person moves from the bottom to the middle quintile is 1 - (15.4-12.9)/(12.6-2.2), or 76 percent. http://gregmankiw.blogspot.com/2018/06/an-effective-marginal-tax-rate.html http://gregmankiw.blogspot.com/2018/06/an-effective-marginal...
cascom 8y ago
Paul Krugman is just so tiresome - he’s as partisan an ideologue as they come planting a patent falsehood every third sentence
- sharemywin 8y ago
  He's just quoting a paper about marginal utility. What part did he lie about?
  - cascom 8y ago
    I don't have the energy for a lengthy reply but, the short version is that for someone as economically knowledgeable as him to present his case in such a way is dishonest, when every one of his arguments/supporting-facts has numerous embedded suppositions or real counter arguments. I'll give one example, look at Krugman's chart on tax rates and growth, seems compelling! Not so much, when you factor in tax avoidance/evasion and realize that net tax paid has remained relatively constant [1] - he knows that, and purposely ignores it. [1] https://www.mercatus.org/publication/tax-rates-vs-tax-revenues https://www.mercatus.org/publication/tax-rates-vs-tax-revenu...
- nabla9 8y ago
  Reflexive ad hominem-arguments (lies actually) against Krugman from people who don't read his articles. He is partisan, but his economic arguments are good.
  - cascom 8y ago
    His economic arguments are only good to the extent that you agree with the economic goals which any economic policy is trying to achieve. For example the Diamond Saez paper he references is optimizing for "Social Welfare" which is in turn defined as more equal distribution of resources. So yes if your goal is redistribution of wealth perhaps the 73% number is the right number. What that does not mean is that 73% marginal tax rate is the objectively optimal tax rate under all scenarios or policy objectives! Not sure how you arrive at reflexive or lies
    - nabla9 8y ago
      You should have started with that argument. Instead you started with single sentence ad-hominenm.

2 points by colinprince 8y ago

Recall the difference between marginal tax rate and tax rate. 90% marginal income tax rate is not the same as 90% income tax rate. It seems that the failure to recognize the difference creates lots of unnecessary confusion in the social media comments. Especially among the first comments.

sharemywin 8y ago
Sorry, I couldn't help my self. Technically around $2B the difference between a tax rate of 90% and a marginal tax rate of 90% becomes a rounding error. Assuming the last tier is $10M.
- nabla9 8y ago
  Good data point. Although there are no individuals with $2B yearly income, It would be good idea to put same the upper limit for the __effective__ marginal tax rate in every income bracket. Poor people can have very high effective marginal tax rates. > To put it another way, the effective marginal tax rate when a person moves from the bottom to the middle quintile is 1 - (15.4-12.9)/(12.6-2.2), or 76 percent. http://gregmankiw.blogspot.com/2018/06/an-effective-marginal-tax-rate.html http://gregmankiw.blogspot.com/2018/06/an-effective-marginal...

cascom 8y ago

Paul Krugman is just so tiresome - he’s as partisan an ideologue as they come planting a patent falsehood every third sentence

sharemywin 8y ago
He's just quoting a paper about marginal utility. What part did he lie about?
- cascom 8y ago
  I don't have the energy for a lengthy reply but, the short version is that for someone as economically knowledgeable as him to present his case in such a way is dishonest, when every one of his arguments/supporting-facts has numerous embedded suppositions or real counter arguments. I'll give one example, look at Krugman's chart on tax rates and growth, seems compelling! Not so much, when you factor in tax avoidance/evasion and realize that net tax paid has remained relatively constant [1] - he knows that, and purposely ignores it. [1] https://www.mercatus.org/publication/tax-rates-vs-tax-revenues https://www.mercatus.org/publication/tax-rates-vs-tax-revenu...
nabla9 8y ago
Reflexive ad hominem-arguments (lies actually) against Krugman from people who don't read his articles. He is partisan, but his economic arguments are good.
- cascom 8y ago
  His economic arguments are only good to the extent that you agree with the economic goals which any economic policy is trying to achieve. For example the Diamond Saez paper he references is optimizing for "Social Welfare" which is in turn defined as more equal distribution of resources. So yes if your goal is redistribution of wealth perhaps the 73% number is the right number. What that does not mean is that 73% marginal tax rate is the objectively optimal tax rate under all scenarios or policy objectives! Not sure how you arrive at reflexive or lies
  - nabla9 8y ago
    You should have started with that argument. Instead you started with single sentence ad-hominenm.