Nothing Up My Sleeves

Posted on November 15, 2010 by Timothy Burke

The “interactive budget” feature at the New York Times was kind of interesting. I played around with several scenarios. The thing that surprised me is how easy it is to close the gap simply by returning most taxation to mid-Clinton Administration levels, particularly on people making more than $250,000 a year plus taking away some really huge weapons expenditures. But of course in the dark days of the 1990s, rich people were fleeing the United States in huge numbers, leaving our country a smoldering ruin of middle-classness, so let’s not relieve that nightmare. I’m sure Very Serious People will be along any minute now to tell us why it’s naive to think that this approach to revenue and expenditure could ever be implemented, given that the 21st Century is so very different than the 1990s.

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6 Responses to Nothing Up My Sleeves

  1. richwiss says:
    November 15, 2010 at 10:08 am

    I’m not very serious, but I agree that just cranking up the taxes worked like a charm. It’s a shame that Very Serious People won’t do it!

  2. kderosa says:
    November 16, 2010 at 7:34 am

    Yes, just cranking up taxes worked like a charm provided we were in a tulip-craze-like dot com bubble. Those same conditions don’t exist today.

    Also, funny how the call for raising taxes is always at a level just above a college professor and his wife’s income. Just saying.

  3. Timothy Burke says:
    November 16, 2010 at 9:03 am

    Funny how not being in a dot.com bubble nevertheless doesn’t seem to have affected the compensation levels of the ultrarich much. How is that possible? If only I were an economist, I would understand this mystery.

    Also funny how the call for lowering taxes seems most intensely focused on people above a college professor and his wife. But I’d be content to see taxes rise on salaries between 100,000 and 250,000 if there was a proportional increase on salaries above 250,000 and then again on 1 million plus compensation. But that would be unprecedented, right? There has never ever been higher taxation than now on rich Americans in the history of this country, and we’ve never taxed estates. I’m sure that if there were such taxation, we would fall into a precipitious economic tailspin and nothing would trickle-down and all our Laffer curves would bend the wrong way. Because the last thing you want to do in a recession is increase the tax burden on the ultrarich, given that they’re carrying the whole economy on their backs. That would be like class warfare or socialism or something like that.

  4. north says:
    November 17, 2010 at 12:16 pm

    I also fixed the budget with a minimum of effort – my solution ended up at about 70/30 revenue/spending, and I had zero ambivalence about the policies I went for. It’s a political problem, not a policy one. But the political problem is real.

    BTW, have you read Winner-Take-All Politics? I find it a really good, comprehensible take on the policies that have led inequality to increase, and the politics that keep inequality from being addressed.

  5. kderosa says:
    November 17, 2010 at 3:08 pm

    Since when did $250,000 in family start qualifying as ultrarich? If it did your argument would be much more compelling.

    From 2007 to 2008, the richest 1% of Americans lost 8.4% of their income, compared with a 2.6% drop in earnings for the average America. The very richest, the top .01% of Americans, saw their income drop even further, by 12.7%. And incomes in 2007 weren’t exactly the same as during the height of the dotcom bubble.

    Also, you’re confusing marginal tax rates with revenue generated from taxes. The decrease in tax rates since 1980 were also accompanied by the closing of many loopholes (no one with a competent tax attorney paid those 90% rates). This is why the taxes we collect from the rich are near all time highs.

    Lastly, there is no prohibition against your voluntarily sending in whatever amount of tax you want over and above your bill.

  6. Doug says:
    November 18, 2010 at 2:18 am

    An income of $250,000 is five times the median family income for the United States. (Source: The 2010 Statistical Abstract of the United States. Booyah.)

    You can quibble about whether that’s ultrarich, or megarich, or merely seriously fucking rich, but whatever, five times the median is way up there.

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