7 ms·

I find posts like this one depressing. They're cynical and shortsighted. The premise of such posts is that if people were aware of who was getting a tax cut th

by cletus 16y ago

I find posts like this one depressing. They're cynical and shortsighted. The premise of such posts is that if people were aware of who was getting a tax cut they would be against it. Put another way: the premise is that everyone is purely motivated by self-interest. There are two immediate problems with this line of thinking. The first is tha it ignores how aspirational people are.i remember a survey from the 2000 election when Gore made the mistake of demonizing the top 1% repeatedly. The survey show something like 19% of people thought the were the top 1% and another 20% thought they would be someday. The second problem is the whole "money for rich people = bad" argument. Some may ascribe to Reagenesque trickle down economics. Others may see that overtaxing the rich is ultimately shortsighted. Yet others may not get hung upon percentages and look at the absolute tax burden (iirc the top 1% pay ~40% of the tax burden). Personally I just object to the tone of the rhetoric where politicians talk about "affording" or "paying for" a tax cut like they're giving away money. The reality is just that they're taking less money. Bit of a difference. All of this is just "policy theatre" however. What the US (and most of the West for that matter) is facing a far bigger problem that the current systemis unsustainable and no politician wants to be at the helm when the music stop (to mix metaphors) with declining birth rates and increasing life expectancy.

jonhendry 16y ago
" The reality is just that they're taking less money. Bit of a difference." Can you afford to take a year off from work? It's just taking less money. The fact is that tax cuts aren't free. If they aren't matched by spending cuts, you're just deferring the tax increase until later and incurring deficits in the meantime. So you have to decide what you're going to cut. Which means weighing, say, decent healthcare for veterans, versus the benefit of the tax cut to people who are probably quite well-off already. The Republicans in the Bush years were not willing to do that. So they cut taxes. And raised spending. And we could afford neither.
- cletus 16y ago
  Nice try but no sale. This is the problem: talking about this issue will get you labeled as being anti-<insert emotive issue here> (health care for veterans in your case). The budget is blowing out for three reasons: Social Security, health care and the military. Of the three only the last is largely discretionary (being the ongoing cost for campaigns in Iraq and Afghanistan). When FDR introduced Social Security there was something like 50 working people for every retired person and the average life expectancy was probably only 60 or so. It's a straight money goes in money goes out system with no saving or planning for future spending. Everyone knows this is unsustainable. It's merely a question of when something will change and what. The smart money is on raising the retirement age. Health care costs are spiraling. This is a much more complicated and multi-faceted problem. Personally I think part of the problem is the blank chewue mentality we have to health care. Basically it doesn't matter how much it costs to research and develop pharmaceuticals and medicine, we expect to be provided it. So companies largely ignore the costs. It's a bit like saying to a subcontractor: you can choose to spend as much as you like and I'll pay you a 20% margin on top of that. What is the motivation of that subcontractor and the inevitable outcome? Also I think you need to look at the structure of the health care system. I suspect the US has the most expensive health care in the developed world. I think systemic inefficiencies and overprotective IP laws play a bigpart in this.
  - jfager 16y ago
    I don't get how anything you wrote after "Nice try but no sale" disagrees at all with what the person you replied to said.
  - jshen 16y ago
    I'm kind of confused. The big three are our biggest expenses (which includes healthcare for veterans). So giving tax cuts to the super rich (or anyone really) without addressing the big three is the problem that the person you're replying to is pointing out. How is that a "no sale"? Cause he mentioned veterans?
    - cletus 16y ago
      http://www.comw.org/qdr/fulltext/100223williams.pdf http://www.comw.org/qdr/fulltext/100223williams.pdf > Growth in Budgets for Military Health Care > The DoD's health care costs rose from about $20 billion in 1998 to $47 billion in 2010 (FY 2010 dollars)—an annual growth rate of 7.4 percent above inflation. Absent changes in policy, CBO projects they will at least double between now and 2028. It's no sale because it's ~2% of the budget masked in emotion, which is at best an irrelevant distraction and at worst a deliberate attempt to demonize opposing views. Limit the focus to just the (increasingly ill-named) "defense" budget and even then it's only around 10% and is dwarfed by the cost of discretionary operations within that budget/department.
      - natnat 16y ago
        That last argument was about tax cuts, though, and not military health care spending. Even if we held military spending constant, it still would have been irresponsible to cut taxes because there was no corresponding spending cut that ensured those tax cuts were paid for.
      - mattrepl 16y ago
        I believe you want the Department of Veteran Affairs. The 2010 budget was $114 billion. http://www.va.gov/budget/products.asp http://www.va.gov/budget/products.asp
- MichaelSalib 16y ago
  Indeed, your comment reminds me of that radical leftist Milton Friedman who once wrote "Remember, to spend is to tax." What a pity that so many have forgotten Friedman's words.
pyre 16y ago
> with declining birth rates and increasing life expectancy. Unless you're talking about Japan, I'm going to ask that you provide hard numbers before throwing statements like this out.
- th 16y ago
  Comparison of historical age distributions in the U.S. suggest this problem. http://www.wolframalpha.com/input/?i=u.s.+age+distribution+in+1970 http://www.wolframalpha.com/input/?i=u.s.+age+distribution+i... http://www.wolframalpha.com/input/?i=u.s.+age+distribution+in+2010 http://www.wolframalpha.com/input/?i=u.s.+age+distribution+i... This problem is much worse in China.
  - pyre 16y ago
    Maybe I'm reading those wrong, but I'm not seeing 'declining birth rates' in that data. (I should have been clearer, but that was the issue that I had with the original statement)
ramanujan 16y ago
The other critical point is that "the rich" are not passive targets but highly mobile. Swing at them too hard and too repeatedly and they will just leave. If your life is on your laptop this really isn't that hard. Unless they then make it hard. After all, the state paid for your (compulsory) education, so to some you owe them all future success. And so you can't leave to escape a regime which is broke and desperate. The end game of this process is East Germany or North Korea, where the state taxes 100% and literally shoots you if you try to leave. In the US, of course, we don't shoot you if you emigrate...but in 2008 the US did, for the first time, implement a massive ~50% exit tax for those over 200k in net worth who renounce citizenship. It was remarked upon as a radical shift, as a desirable/wealthy place makes it hard to immigrate while an undesirable/destitute country usually makes it hard to emigrate. A harbinger of things to come?
- rapind 16y ago
  Depends on how rich you mean. Why would the very rich leave a plutocracy many of them have worked very hard to create? The US is a pretty sweet place to live if you have a lot of money. You not only get to live in luxury, you also have a disproportionate affect on public policies that allow you to grow your wealth. Maybe the 2th would be happy to leave though.
- jshen 16y ago
  I'm really uncomfortable with the implicit metaphor that this is a fight between the rich and the non-rich. I don't think that is an accurate representation of the situation. Also, many of the rich would not be rich if they were born in some other country. To a large degree they are the product of the opportunities of the environment they are in. That environment requires investment and good management. Our current situation has people like Warren Buffet paying a far lower percentage of their income in taxes than you and I, yet the rich use government services to a far greater extent than the rest of us. The US military isn't protecting oil fields I own in nigeria because I don't own any oil fields. The fire dept. isn't protecting the factories I own throughout the US because I don't own any. I think it only makes sense that those who benefit the most from our government, and who can afford it, invest in it accordingly. For starters they shouldn't have a significantly lower percentage of income taxed than the rest of us.
dkarl 16y ago
Are you suggesting that if you removed the grossly incorrect image of reality someone has and replaced it with a radically different one, that they would have the same opinions about closely related policy questions? I'm skeptical. People try to keep their view of reality in line with their political beliefs. How do you think Americans end up believing such wacky things? The survey show something like 19% of people thought the were the top 1% and another 20% thought they would be someday. If you're claiming that perpetuating this delusion would cancel out the effects of undermining the other delusion, you might be right. On the other hand, maybe curing this delusion too would compound the effect of curing the other delusion. Or hey, they might even be related. Personally I just object to the tone of the rhetoric where politicians talk about "affording" or "paying for" a tax cut like they're giving away money. The reality is just that they're taking less money. Bit of a difference. Personally, I think it's great when politicians use language that reminds people that it's our own government and our budget. Can I as a taxpayer, or we as taxpayers collectively, afford to move money from the "public expenditure" bucket to the "private expenditure" bucket? It's a reasonable question. What bothers me is politicians who suggest that spending cuts will just magically materialize and save the day if we don't pay enough taxes. Sorry, no, that doesn't just magically happen. The alternative to reminding Americans of their responsibilities is to alienate them from the government, i.e., stop them from thinking like citizens of a democracy. Let them think the government can go completely to hell, ruin its credit and go bust, and the people will bear no responsibility. Let them think that government spending doesn't reflect the will of the people, so the people have no responsibility to pay for it. Or let them think that maybe government spending does reflect the will of the people, but that because they personally disagree with part of the spending, they aren't responsible for paying for the whole thing. The truth is that it's in our interest to keep the government financially healthy and creditworthy. It makes a big difference to us whether the government pays its bills over the long term. It's also true that in a democracy we're responsible for the well-being of a government that doesn't follow our individual whims. When we ponder how to pay for government spending, we can't just think about how to pay for the spending we approve of. We're responsible for the whole thing, conservative or liberal, big spender or "fiscal conservative," whether we like it or not. I can't refuse to pay for the Iraq War just because I opposed it. Yet that's what pundits constantly implicitly ask us to do. They target conservatives especially: we should not pay enough taxes to support entitlements because entitlements are bad policy. Such-and-such is unsustainable; therefore, don't worry about paying for it. Unfortunately, cutting taxes doesn't cause spending cuts. In a cash economy it might work, but in age of credit, when credit is necessary to get any business done, "starve the beast" is the practical equivalent of, "I'm going to eat so much that I'll be forced to exercise!" The one thing is only connected to the other by discipline (keeping revenue and spending in line) or catastrophe (failing to maintain our creditworthiness.) Pretending they're perforce connected under normal conditions, and hence the country should only collect enough revenue to pay for the spending we personally support, is a free pass to self-indulgence, because nobody in the country supports the entire budget. Since everybody opposes a significant chunk of federal spending, we would all agree on funding just a fraction of it. Then we could all blame the shortfall on the people who supported whatever fraction of spending we opposed. It would be -- no, it is -- a perfect scenario: nobody thinks the shortfall is our fault, even though we all support it! That's absurd, of course. We're all responsible for the whole budget, even if we personally didn't support every piece of it. I'm responsible for finding some way of paying for the Iraq War. Conservatives are responsible for finding some way to pay for welfare benefits. It's our government; we're responsible. If we don't want to pay for something, we have to persuade our fellow citizens to oppose the spending, and if that isn't enough, we may need to reform our political processes. What we can't do, in an age when credit is a necessity for getting anything done, is agree as a nation not to pay for spending that we as a nation agree to indulge in. That's why it makes sense to ask if we can afford a tax cut.
netcan 16y ago
I don't see why you think the premise is that people are purely motivated by self interest. The premise and conclusion is spelled out quite plainly. Matt Yglesias is claiming that Americans underestimate the wealth of the poor and overestimate the wealth of the poor. He concludes means they underestimate the needs of the poor. I think you are making the assumption that what is being promoted is anti-wealthy as opposed to pro-poor. I think it's probably safe to assume the authors consider themselves in the latter.
Confusion 16y ago
The premise of such posts is that if people were aware of who was getting a tax cut they would be against it. That is not a premise, but a corollary from the conclusion. The conclusion is that people wish for a distribution of wealth that is vastly different from the actual wealth distribution. The corollary is that they would not support measures that retain the status quo or skew the distribution further from their expressed optimum. Put another way: the premise is that everyone is purely motivated by self-interest. How on earth is that 'putting the same thing in another way'? The richest quintile thinks the poorest quintile should be more wealthy. If they took that conclusion from these statistics to their logical consequence, they would immediately donate the relevant portion of their wealth and allow it to be redistributed. If anything, the numbers suggest rational people would act in an altruistic way to change things towards their expressed optimal wealth distribution.
brown9-2 16y ago
Some may ascribe to Reagenesque trickle down economics. And the problem with this counterargument is that trickle-down does not work.

by cletus 16y ago

jonhendry 16y ago

" The reality is just that they're taking less money. Bit of a difference." Can you afford to take a year off from work? It's just taking less money. The fact is that tax cuts aren't free. If they aren't matched by spending cuts, you're just deferring the tax increase until later and incurring deficits in the meantime. So you have to decide what you're going to cut. Which means weighing, say, decent healthcare for veterans, versus the benefit of the tax cut to people who are probably quite well-off already. The Republicans in the Bush years were not willing to do that. So they cut taxes. And raised spending. And we could afford neither.

cletus 16y ago
Nice try but no sale. This is the problem: talking about this issue will get you labeled as being anti-<insert emotive issue here> (health care for veterans in your case). The budget is blowing out for three reasons: Social Security, health care and the military. Of the three only the last is largely discretionary (being the ongoing cost for campaigns in Iraq and Afghanistan). When FDR introduced Social Security there was something like 50 working people for every retired person and the average life expectancy was probably only 60 or so. It's a straight money goes in money goes out system with no saving or planning for future spending. Everyone knows this is unsustainable. It's merely a question of when something will change and what. The smart money is on raising the retirement age. Health care costs are spiraling. This is a much more complicated and multi-faceted problem. Personally I think part of the problem is the blank chewue mentality we have to health care. Basically it doesn't matter how much it costs to research and develop pharmaceuticals and medicine, we expect to be provided it. So companies largely ignore the costs. It's a bit like saying to a subcontractor: you can choose to spend as much as you like and I'll pay you a 20% margin on top of that. What is the motivation of that subcontractor and the inevitable outcome? Also I think you need to look at the structure of the health care system. I suspect the US has the most expensive health care in the developed world. I think systemic inefficiencies and overprotective IP laws play a bigpart in this.
- jfager 16y ago
  I don't get how anything you wrote after "Nice try but no sale" disagrees at all with what the person you replied to said.
- jshen 16y ago
  I'm kind of confused. The big three are our biggest expenses (which includes healthcare for veterans). So giving tax cuts to the super rich (or anyone really) without addressing the big three is the problem that the person you're replying to is pointing out. How is that a "no sale"? Cause he mentioned veterans?
  - cletus 16y ago
    http://www.comw.org/qdr/fulltext/100223williams.pdf http://www.comw.org/qdr/fulltext/100223williams.pdf > Growth in Budgets for Military Health Care > The DoD's health care costs rose from about $20 billion in 1998 to $47 billion in 2010 (FY 2010 dollars)—an annual growth rate of 7.4 percent above inflation. Absent changes in policy, CBO projects they will at least double between now and 2028. It's no sale because it's ~2% of the budget masked in emotion, which is at best an irrelevant distraction and at worst a deliberate attempt to demonize opposing views. Limit the focus to just the (increasingly ill-named) "defense" budget and even then it's only around 10% and is dwarfed by the cost of discretionary operations within that budget/department.
    - natnat 16y ago
      That last argument was about tax cuts, though, and not military health care spending. Even if we held military spending constant, it still would have been irresponsible to cut taxes because there was no corresponding spending cut that ensured those tax cuts were paid for.
    - mattrepl 16y ago
      I believe you want the Department of Veteran Affairs. The 2010 budget was $114 billion. http://www.va.gov/budget/products.asp http://www.va.gov/budget/products.asp
MichaelSalib 16y ago
Indeed, your comment reminds me of that radical leftist Milton Friedman who once wrote "Remember, to spend is to tax." What a pity that so many have forgotten Friedman's words.

pyre 16y ago

> with declining birth rates and increasing life expectancy. Unless you're talking about Japan, I'm going to ask that you provide hard numbers before throwing statements like this out.

th 16y ago
Comparison of historical age distributions in the U.S. suggest this problem. http://www.wolframalpha.com/input/?i=u.s.+age+distribution+in+1970 http://www.wolframalpha.com/input/?i=u.s.+age+distribution+i... http://www.wolframalpha.com/input/?i=u.s.+age+distribution+in+2010 http://www.wolframalpha.com/input/?i=u.s.+age+distribution+i... This problem is much worse in China.
- pyre 16y ago
  Maybe I'm reading those wrong, but I'm not seeing 'declining birth rates' in that data. (I should have been clearer, but that was the issue that I had with the original statement)

ramanujan 16y ago

The other critical point is that "the rich" are not passive targets but highly mobile. Swing at them too hard and too repeatedly and they will just leave. If your life is on your laptop this really isn't that hard. Unless they then make it hard. After all, the state paid for your (compulsory) education, so to some you owe them all future success. And so you can't leave to escape a regime which is broke and desperate. The end game of this process is East Germany or North Korea, where the state taxes 100% and literally shoots you if you try to leave. In the US, of course, we don't shoot you if you emigrate...but in 2008 the US did, for the first time, implement a massive ~50% exit tax for those over 200k in net worth who renounce citizenship. It was remarked upon as a radical shift, as a desirable/wealthy place makes it hard to immigrate while an undesirable/destitute country usually makes it hard to emigrate. A harbinger of things to come?

rapind 16y ago
Depends on how rich you mean. Why would the very rich leave a plutocracy many of them have worked very hard to create? The US is a pretty sweet place to live if you have a lot of money. You not only get to live in luxury, you also have a disproportionate affect on public policies that allow you to grow your wealth. Maybe the 2th would be happy to leave though.
jshen 16y ago
I'm really uncomfortable with the implicit metaphor that this is a fight between the rich and the non-rich. I don't think that is an accurate representation of the situation. Also, many of the rich would not be rich if they were born in some other country. To a large degree they are the product of the opportunities of the environment they are in. That environment requires investment and good management. Our current situation has people like Warren Buffet paying a far lower percentage of their income in taxes than you and I, yet the rich use government services to a far greater extent than the rest of us. The US military isn't protecting oil fields I own in nigeria because I don't own any oil fields. The fire dept. isn't protecting the factories I own throughout the US because I don't own any. I think it only makes sense that those who benefit the most from our government, and who can afford it, invest in it accordingly. For starters they shouldn't have a significantly lower percentage of income taxed than the rest of us.

dkarl 16y ago

Are you suggesting that if you removed the grossly incorrect image of reality someone has and replaced it with a radically different one, that they would have the same opinions about closely related policy questions? I'm skeptical. People try to keep their view of reality in line with their political beliefs. How do you think Americans end up believing such wacky things? The survey show something like 19% of people thought the were the top 1% and another 20% thought they would be someday. If you're claiming that perpetuating this delusion would cancel out the effects of undermining the other delusion, you might be right. On the other hand, maybe curing this delusion too would compound the effect of curing the other delusion. Or hey, they might even be related. Personally I just object to the tone of the rhetoric where politicians talk about "affording" or "paying for" a tax cut like they're giving away money. The reality is just that they're taking less money. Bit of a difference. Personally, I think it's great when politicians use language that reminds people that it's our own government and our budget. Can I as a taxpayer, or we as taxpayers collectively, afford to move money from the "public expenditure" bucket to the "private expenditure" bucket? It's a reasonable question. What bothers me is politicians who suggest that spending cuts will just magically materialize and save the day if we don't pay enough taxes. Sorry, no, that doesn't just magically happen. The alternative to reminding Americans of their responsibilities is to alienate them from the government, i.e., stop them from thinking like citizens of a democracy. Let them think the government can go completely to hell, ruin its credit and go bust, and the people will bear no responsibility. Let them think that government spending doesn't reflect the will of the people, so the people have no responsibility to pay for it. Or let them think that maybe government spending does reflect the will of the people, but that because they personally disagree with part of the spending, they aren't responsible for paying for the whole thing. The truth is that it's in our interest to keep the government financially healthy and creditworthy. It makes a big difference to us whether the government pays its bills over the long term. It's also true that in a democracy we're responsible for the well-being of a government that doesn't follow our individual whims. When we ponder how to pay for government spending, we can't just think about how to pay for the spending we approve of. We're responsible for the whole thing, conservative or liberal, big spender or "fiscal conservative," whether we like it or not. I can't refuse to pay for the Iraq War just because I opposed it. Yet that's what pundits constantly implicitly ask us to do. They target conservatives especially: we should not pay enough taxes to support entitlements because entitlements are bad policy. Such-and-such is unsustainable; therefore, don't worry about paying for it. Unfortunately, cutting taxes doesn't cause spending cuts. In a cash economy it might work, but in age of credit, when credit is necessary to get any business done, "starve the beast" is the practical equivalent of, "I'm going to eat so much that I'll be forced to exercise!" The one thing is only connected to the other by discipline (keeping revenue and spending in line) or catastrophe (failing to maintain our creditworthiness.) Pretending they're perforce connected under normal conditions, and hence the country should only collect enough revenue to pay for the spending we personally support, is a free pass to self-indulgence, because nobody in the country supports the entire budget. Since everybody opposes a significant chunk of federal spending, we would all agree on funding just a fraction of it. Then we could all blame the shortfall on the people who supported whatever fraction of spending we opposed. It would be -- no, it is -- a perfect scenario: nobody thinks the shortfall is our fault, even though we all support it! That's absurd, of course. We're all responsible for the whole budget, even if we personally didn't support every piece of it. I'm responsible for finding some way of paying for the Iraq War. Conservatives are responsible for finding some way to pay for welfare benefits. It's our government; we're responsible. If we don't want to pay for something, we have to persuade our fellow citizens to oppose the spending, and if that isn't enough, we may need to reform our political processes. What we can't do, in an age when credit is a necessity for getting anything done, is agree as a nation not to pay for spending that we as a nation agree to indulge in. That's why it makes sense to ask if we can afford a tax cut.

netcan 16y ago

I don't see why you think the premise is that people are purely motivated by self interest. The premise and conclusion is spelled out quite plainly. Matt Yglesias is claiming that Americans underestimate the wealth of the poor and overestimate the wealth of the poor. He concludes means they underestimate the needs of the poor. I think you are making the assumption that what is being promoted is anti-wealthy as opposed to pro-poor. I think it's probably safe to assume the authors consider themselves in the latter.

Confusion 16y ago

The premise of such posts is that if people were aware of who was getting a tax cut they would be against it. That is not a premise, but a corollary from the conclusion. The conclusion is that people wish for a distribution of wealth that is vastly different from the actual wealth distribution. The corollary is that they would not support measures that retain the status quo or skew the distribution further from their expressed optimum. Put another way: the premise is that everyone is purely motivated by self-interest. How on earth is that 'putting the same thing in another way'? The richest quintile thinks the poorest quintile should be more wealthy. If they took that conclusion from these statistics to their logical consequence, they would immediately donate the relevant portion of their wealth and allow it to be redistributed. If anything, the numbers suggest rational people would act in an altruistic way to change things towards their expressed optimal wealth distribution.

brown9-2 16y ago

Some may ascribe to Reagenesque trickle down economics. And the problem with this counterargument is that trickle-down does not work.