The Left has lost...........

[jk]

Re: The Left has lost...........

a few comments:

1. don't know where i read this; might even have been here, but worth repeating: socialism worked so well for the rich that the poor, working class and middle classes decided they wanted some too.

2. the rich states with high state and local taxes were ALREADY subsidizing the poorer states, prior to the tax law changes. the salt restrictions make this redistribution even more extreme. OTOH, the wealthiest have ways to move money around such that it is more the middle and upper middle classes who are taking the hit.

3. it was once radical to call for public funding of secondary school. now it's the norm. there is nothing radical about suggesting that such funding be extended through community college/1st 2 years of college, or even 4 years of college. it might even be a good idea to extend it through medical school. in spain, for example [maybe the others, too, i'm not sure] schooling through medical school is free, then doctors work on salary for the state medical system.

4. wringing your hands over the cost of universal health care? think of all the money freed up by not paying for our current massively inefficient system. that money is going to go somewhere. where?

[dcarrigg]

Re: The Left has lost...........

You're literally defending debt-financing a multi-trillion dollar give-away to 400 lucky, select families just because of blind faith that tax cuts are always and everywhere good. At this point I'm so sick of the word "confiscate" that it's starting to sound like a good idea. Especially those who didn't earn it and got tens of billions from a lucky marriage or sperm shot combined with years of government policy that benefits them exclusively at the expense of anyone else. And the fact that you're calling a rollback to 1990s or 1980s or even 2016s tax rates "confiscation" is the proof in the pudding.

Were we all communist slaves in 1980? In 1990? In 2015?

Do you really think that the fact I want to undo a few tax cuts to go back to the rates that existed in the US in those years makes me a communist confiscator?

The fact you're calling me one for suggesting it is totally outrageous and insane. It is only made possible by decades of targeted propaganda.

It's about control alright. You're simply refusing to acknowledge who's controlling whom.

[jk]

Re: The Left has lost...........

ps to my #31 above:
if the productivity gains of the last few decades had been evenly distributed, instead of going solely to the upper 0.1%, more of that money would have spent- stimulating consumption- and less debt would have been accumulated.

we had pretty rapid post-wwii growth for many reasons. maybe part of it was because eisenhower was a confiscatory socialist:

During the administration of President Dwight D. Eisenhower, from 1953 to 1961, the top income bracket in the United States climbed to a marginal tax rate of 91 percent. Taxes on corporate profits were two times as great as they are in 2017, and that's before the current proposal to cut that rate to 21 percent.

[dcarrigg]

Re: The Left has lost...........

That's the trick with the rhetoric. You can never go back. Grover Norquist won. Pricks like him who grew up in Weston with a silver spoon I guess always will. But the tax pledge is how he did it. A whole propaganda network that always demands more tax cuts. That never cares about deficits. That calls any attempts to spend government money on anything communism.

So every time they get power, tax rates get cut, and the idea of rolling back the cut becomes instant communism.

Think the Trump tax cuts were a bad idea? Communist.
Want to put tax rates to where they were last year? Communist. Anti-freedom. Confiscation.

Think the W. Bush tax cuts were a bad idea? Communist.
Want to put tax rates to where they were in 2000? Communist. Anti-freedom. Confiscation.

Think the Reagan tax cuts were a bad idea? Communist.
Want to put rates to where they were in 1980? Communist. Anti-freedom. Confiscation.

But the time you get to Eisenhower, you're a quadruple-communist freedom murdering confiscation machine of the highest order.


This is the rhetoric we live with. A 1.9% annual treasury float increase to make 4 year college tuition free is communism. Suspending the latest tax cut for a year to pay for that (and a whole lot more) is communism. Everyone before whatever year you're in is communist. I mean that. The whole past is communist. All history of American history was confiscatory communism. Reagan's capital gains rates were higher. He was a communist. H. W. Bush raised taxes. Communist. Obama? That guy was definitely a communist. Probably a Kenyan Muslim fascist too. And Alex Jones says his wife was a man. Anyways, having a healthcare system like Canada? Definitely communist. Canucks are communist. Even more communist than Yankees. I know because hockey and Molson are way more communist than budweiser and football.

Is it any wonder young kids are starting to call themselves socialist in a toxic environment like this?

[jk]

Re: The Left has lost...........

there used to be such a thing as community and shared interests. i guess going through wwii convinced a lot of people that we had to hang together to be successful in a dangerous world. thus it was ok for a ceo to make only 30x what his line workers did, instead over 300x now. the atomism of libertarianism goes a step too far, in not recognizing that communities are worth having. it is the mirror image of the masses of pseudo-communism, soviet-style, in which the individual was important only in terms of his role in the unified social organism. we can't seem to see the value in 2 antipodal ideas at the same time. so the pendulum swings. we get robber barrons and grotesque inequality, and then we get - i hope, best case - some new-dealish policies to get us through the coming maelstrom.

[dcarrigg]

Re: The Left has lost...........

Never underestimate the power or pettiness of a few pissed off Austrian noblemen who were angry the US post-war plans didn't include putting them back into power in the old eastern empire. There's a funding stream for the projects at Chicago and Auburn and elsewhere. And there's a reason the libertarians in the US took the Habsburg royal family's black and yellow flag as their own. Same reason they call it Austrian economics. It was always an anti-democratic, anti-republican, pro-monarchist movement by noblemen, for noblemen. Old Baron Von Hayek wanted 'his country' back just as badly as Von Mises and Pretender to the Throne Kaiser Otto Von Habsburg. Not giving it to them maybe have been a much greater long term strategic mistake than either Roosevelt or Truman ever could have envisioned. Then again, who knows? Stalin probably wouldn't just hand over the Hungary side of Austria-Hungary anyways. And even today, Austrian economics is more or less dead in Austria. It's just that they banished the royal family and lots of nobles fled here to America to make our lives miserable. But notice all the major libertarian thinkers and outlets can't stop being monarchist. Apparently free markets means bowing to a crown. Reason does it. Mises does it. Molyneux does it. Kinda weird right? I mean, seriously, why would a libertarian think tank buried deep in Auburn Alabama be hosting long 1940s Habsburg screeds like this 80 years later? Doesn't make a whole lot of sense unless you know the history. But once you realize the libertarian and monarchist movements are all mixed up and intertwined and united by major thinkers and writers from Mont Perelin, it doesn't take a complicated conspiracy to see what happened. The foundations of the libertarian ideology in America and its seminal works were written by noblemen and monarchists. That's why they can't really abide Locke or Jefferson when you dig deep into it. British-born classic liberals like those two tended to like ideas like abolishing primogeniture and entails and implementing estate taxes and public schools. Very anti-monarchist and anti-nobility stuff.

[DSpencer]

Re: The Left has lost...........

2. the rich states with high state and local taxes were ALREADY subsidizing the poorer states, prior to the tax law changes. the salt restrictions make this redistribution even more extreme. OTOH, the wealthiest have ways to move money around such that it is more the middle and upper middle classes who are taking the hit.

Do you consider rich states subsidizing poorer states to be a good thing or a bad thing?

I have mixed feelings on the SALT issue. I think we've concentrated too much power in the federal government vs. state and local governments. I think it's a little bit easier to manage things on a smaller scale. So I don't like the disincentive to spend more on the smaller scales.

On the other hand, it seems odd that if you tax yourself more and spend the money on yourself, you don't have to pitch in as much to the national pot. dcarrigg mentions above that some of the state and local taxes are paying for public services that other places have to pay for privately. Why should the residents of one state get a tax break because they have public trash service while in another state they have private trash service?

[jk]

Re: The Left has lost...........

german style multi-payer universal health care

[jk]

Re: The Left has lost...........

On the other hand, it seems odd that if you tax yourself more and spend the money on yourself, you don't have to pitch in as much to the national pot.

even with the full salt deduction, those states were ALREADY pitching in more , i.e. were net donors, to the national pot. having salt deductibility just moderated how much high spending states subsidized low spending states. mutatis mutandi, one could ask why should states that provide high levels of social benefits to their citizens have to subsidize states that grift off the federal budget.

in general the interstate flows of federally mediated money are a good thing- part of what keeps us from falling into eurozone type problems. the question is how much is the right amount- i don't have data to argue for any particular level in the abstract. it is clear, however, that the trump tax bill gave its enormous benefits to the deserving rich, and simultaneously very accurately targeted blue states to take a hit.

[dcarrigg]

Re: The Left has lost...........

Do you consider rich states subsidizing poorer states to be a good thing or a bad thing?

I have mixed feelings on the SALT issue. I think we've concentrated too much power in the federal government vs. state and local governments. I think it's a little bit easier to manage things on a smaller scale. So I don't like the disincentive to spend more on the smaller scales.

On the other hand, it seems odd that if you tax yourself more and spend the money on yourself, you don't have to pitch in as much to the national pot. dcarrigg mentions above that some of the state and local taxes are paying for public services that other places have to pay for privately. Why should the residents of one state get a tax break because they have public trash service while in another state they have private trash service?

For what it's worth, if you consider the counterfactual, I think it's hard to argue against interstate transfers like this. It's very likely if wealth were not flowing consistently from high wealth places to lower wealth places, we'd be worse off as a nation. Mississippi already has a per capita income about 40% lower than Massachusetts. Without that consistent transfer over time, it's all but certain the disparity would be much wider still. There probably wouldn't be any interstates there if they had to be locally funded. And the human development indicators are already way below national averages. Imagine if net transfers were neutral for the last couple centuries instead of positive?

Part of the issue with your trash question truly comes down to population density. Especially in older, denser towns that pre-date the automobile and bigger cities. You can either contract out universal service, or you can privatize it, knowing full well some either will not or cannot pay, and trash accumulation then becomes an externality problem, making the town smelly, unsanitary, and less pleasant to live in or visit. HOAs mitigate this by threat and fine. They're basically private governments that can force you to buy private services and tax you arbitrarily. They don't tend to thrive as well in places where public local government is more participatory and offers higher levels of service. And they're hard to reverse-engineer: that is, for towns built before HOAs, it's hard to rope homes and mortgages that were never subject to them into such an association scheme. But you can't write off HOA fees like local taxes either. And at least local government is much less likely to fine you for paint color choices or a welcome mat. If anything, I the HOA thing seems nightmarishly totalitarian to me. But I'm more concerned about independence and non-domination than the public/private distinction. I just like having the freedom to pick my own welcome mat.

Anyways, I don't have any issue fundamentally with eliminating the SALT deduction itself. The issue comes when I ask, "Why did they eliminate the SALT deduction?" And the answer was, to give even more tax cuts to even wealthier people and corporations. My problem is the regressive transfer from the status quo, not necessarily the mechanism. If you like thinking of taxes as confiscation, then this has to be robbing Peter to pay Paul, only Paul's worth 8+ figures and earns off capital and Peter's a professional raking in 6 off labor. And this at a time when labor's aggregate share of the pie is shrinking compared to capital's.

In the end, no matter what scheme they come up with, it's unlikely that any national taxation scheme would not result in a net transfer from wealthy states to poorer ones. There's a 40%-50% per capita income gap. And so it's unlikely that taxation will be able to bridge that. As long as there is a union, there will always be transfers from the north to the south and from the coasts to the middle. It's only a matter of degree. No use getting upset about it. What I will get upset about is taking a bundle of cash from Brooklyn and delivering it to Park Avenue. That's what I don't think is necessary or desirable. Again, if you're more to the right, and you think of income taxes as dis-incentivizing work, I don't understand why heirs need the biggest tax reductions and they need to be funded by tax increases on professionals. I really cannot see the logic in it. And any economic arguments about how it gooses growth do not seem to be panning out by any rational measure I've seen.

[dcarrigg]

Re: The Left has lost...........

Put more simply, I think this tax cut was the last one. The bottom of the barrel. The culmination of half a century of cuts. They cut so deep this time they debt financed the whole thing and still had to throw the professional class overboard and could only pass it by one vote and then only by suspending normal order in the Senate and ran away from mentioning it in the 2018 election. We're already at the point of doing unpopular things and bending the rules and going deep into debt just to get our last fix. It's typical junky behavior. And sometimes rock bottom is lower than you think it can possibly be. But if tax cuts were heroin, we already got laid off and pawned stuff we took from the neighbor's house and stole copper out of the walls just to get our last hit. And we're lying about our problem, even to ourselves.

[DSpencer]

Re: The Left has lost...........

even with the full salt deduction, those states were ALREADY pitching in more , i.e. were net donors, to the national pot. having salt deductibility just moderated how much high spending states subsidized low spending states. mutatis mutandi, one could ask why should states that provide high levels of social benefits to their citizens have to subsidize states that grift off the federal budget.

in general the interstate flows of federally mediated money are a good thing- part of what keeps us from falling into eurozone type problems. the question is how much is the right amount- i don't have data to argue for any particular level in the abstract. it is clear, however, that the trump tax bill gave its enormous benefits to the deserving rich, and simultaneously very accurately targeted blue states to take a hit.

I found the "left's" reaction to the SALT deduction limit interesting. The deduction is a tax break that mostly benefited the rich. The limit makes the tax progressive. I understand the feeling that it's politically motivated, but that raises the question of whether it was justified in the first place.

Likewise, I find the terminology of rich states subsidizing poor states that grift off the federal budget kind of odd. The left is not OK with saying that someone on welfare or medicaid is a grifter. But somehow, if you add enough recipients together, you get a whole state of grifters?

To me, interstate flow of funds is part and parcel of a progressive taxation system. I can't even see a real way around it. Unless every citizen pays the same per capita tax to the federal government, then isn't it inevitable that states with higher earning residents on average will pay more?

In other words, if you were to say that there should be funds flowing from rich states to poor states, but that the degree/amount is already too much, isn't that the same as saying that our federal tax system is too progressive?

[DSpencer]

Re: The Left has lost...........

In the end, no matter what scheme they come up with, it's unlikely that any national taxation scheme would not result in a net transfer from wealthy states to poorer ones. There's a 40%-50% per capita income gap. And so it's unlikely that taxation will be able to bridge that. As long as there is a union, there will always be transfers from the north to the south and from the coasts to the middle. It's only a matter of degree. No use getting upset about it. What I will get upset about is taking a bundle of cash from Brooklyn and delivering it to Park Avenue. That's what I don't think is necessary or desirable. Again, if you're more to the right, and you think of income taxes as dis-incentivizing work, I don't understand why heirs need the biggest tax reductions and they need to be funded by tax increases on professionals. I really cannot see the logic in it. And any economic arguments about how it gooses growth do not seem to be panning out by any rational measure I've seen.

I think the only scheme is one where the poor pay the exact same or more. Logically, I don't think there is a way around that. Basically, I don't think there's a distinction between states and people when it comes to this.

I am not fiscally liberal, but I was not a fan of tax cuts with no spending cuts. The spending has to be paid for one way or another, whether through later tax increases or the inevitable inflation if the MMT people get their way.

I am also not theoretically opposed to a system where capital is taxed the same as labor. On a practical level my fear is it will just be higher taxes, more spending and no way of ever reducing the latter.

[dcarrigg]

Re: The Left has lost...........

I think the only scheme is one where the poor pay the exact same or more. Logically, I don't think there is a way around that. Basically, I don't think there's a distinction between states and people when it comes to this.

I am not fiscally liberal, but I was not a fan of tax cuts with no spending cuts. The spending has to be paid for one way or another, whether through later tax increases or the inevitable inflation if the MMT people get their way.

I am also not theoretically opposed to a system where capital is taxed the same as labor. On a practical level my fear is it will just be higher taxes, more spending and no way of ever reducing the latter.

We seem to be coming something around to a rational idea of the playing field here. If I had my way, I might slog the majority of the health sector off onto the tax ledger. But really, for most, it'd just be changing the name of the deduction line on a payroll check from Blue Cross to Uncle Sam anyhow. That's about the most radical leftist thing I'd do. Completely normal in many competing capitalist countries.

90s tax rates were sufficient to close the budget gap. The problem is that in the ensuing 30 years, inequality has increased, and labor's share of the pie has shrunk. So if you don't increase the progressivity of the curve, you can't balance the budget even on 90s rates. A greater share of national income comes in the form of capital gains, a smaller share comes in the form of income, and the bottom 80% receive a smaller share, while the top 20% receive a larger share, the majority of which went to the top 0.1%. That's just what happened. It's the reality we have to deal with.

It takes about 20% of GDP in revenue to crack it even as things stand now. I'm not even in a huge rush to do that necessarily. But we were at about 17% of GDP last year and with the corporate cut, I imagine we'll be at 14% or 15% for 2019. And this is at what's gotta be near the peak of the end of the cycle. I bet that'll drop to 12% or lower in the next recession. Can't keep it up forever, unless you buy into the deficits don't matter thing.

But, like I said, it's an optimization problem. Federal spending as percent of GDP was 19% in 1997 and 20% in 2017. It has been between 17% and 24% every year since 1958. Revenues have been between 14% and 20% over that same time period. So that's the deficit. And added up, that's the debt. This is not a hard problem to start solving. It doesn't require huge shifts, if you just want to cover it. But the lowest revenue as a percent of GDP the feds have taken in since 1958 was the period from 2009 to 2012. And now we've gone and slashed taxes further.

We're at looking at consistent 20% of GDP outlays, but record low post-war inflows coming up next year. Add a recession to the mix, and it could get nasty.

As far as what the rates should be, I guess that depends on the country you want to live in. Set as they have been since at least the Reagan admin, they have led to increasing and accelerating inequality. These cuts were designed specifically to exacerbate that. It will take yeoman's work and more targeted brackets and assessments on capital and inheritance or something of that sort to even get to a steady state where labor and capital have a constant share of the pie like they did pre 1980s, and to where gains are shared broadly. Proposals like AOC or others describe go beyond that and seek to compress things and lower the GINI figure. But we're already living in a different world. LeBron will earn an order of magnitude more than Jordan for filling the same role in the 2010s that Jordan did in the 1990s. Billions instead of hundreds of millions. And this phenomenon happens in many fields.

So think of it like the GINI figure. The problem is that even if rates stay constant, if the rules are set up such that capital and the wealthy capture increasing shares of national income, you're going to get diminishing returns. The greater share of national income over the FICA cap, the less income there is for entitlements. Keeping things as they are today leads to labor getting a declining share, and leads to increased inequality and higher GINI coefficients, which has effects on future revenue streams. A smaller percentage of national income is subject to income tax than before. And capital gains are a bigger share of the pie and taxed at lower rates. That's just the way it is.

I mean, if you think of GINI like an optimization problem, obviously if you're sane you probably don't want a GINI of 1, where we're all Jeff Bezos' property. And you probably don't want a GINI of 0 either, where we all have an equal share of everything. But which would you rather be closer to? The closer you get to 1, the harder you have to tax the top in order to prevent the system from running away with itself through everything from regulatory capture to monopoly to coups. I mean, this is a real problem in a lot of countries.

Now maybe there's some happy, optimal figure there, both for growth and for political cohesion. I suspect it's probably around 0.3. Still get plenty of very rich people. But a reasonable spread of resources. And forward momentum with broadly shared growth. That's sort of where the US was in the from the end of the war through the 70s. We're now up over 0.4 and headed for 0.5. In some states, they've crossed it. The curve in NY's actually closer to one man owning everything than an equal distribution. And it's getting worse. And these cuts will exacerbate it.

0.55 really is where things seem to start getting very bad. Civil unrest. Revolutions. Movements to simply take and reappropriate land. Even developing countries like Mexico and Chile and Turkey tend to stop turning the screws at 0.45. There's a point beyond which you're squeezing the majority so hard, it's bad for business. Look at South Africa if you want to see what 0.59 looks like. Land seizures. Water shortages in major metros. I mean, it's not good. The results aren't good. You have to realize that even if you're prone to thinking more inequality's always good. There's a point beyond which the social contract breaks down. There's a point beyond which real infrastructure breaks down.

I hope you'll note that this idea is really pretty damned far away from socialism. I'm not talking about nationalizing ExxonMobil. I'm talking about increasing the slope of progression on the tax curve and playing around with revenue sources to get an extra 4% of GDP onto the tax ledger to cover ongoing expenses, preferably in a manner that isn't bad for the macroeconomy. So the time for austerity would have been now and the last couple of years. I wouldn't recommend cranking taxes up in a recession.

And maybe if I think that funds for public college tuition are a good idea and they'd be 0.04% of GDP, so what? It's not that big of an expense. 10 Virginia Class subs more or less. If it came right down to it, I'm sure I could work with you and even find a targeted 0.04% GDP to cut to offset it. The sequester was bigger. This really isn't a huge expense.

The healthcare thing, well, that's a different story. That really is big. But we're paying big money anyways. We're already raising more revenue per capita than Canadians do. We just don't cover everyone and have much more administrative bloat, fraud, and some higher salaries. Fixing that will require winners and losers. But there's already losers now. 10% of the country with no coverage. Another good chunk who face hardship or bankruptcy. And doing nothing leads to an ever-increasing share of national income going to healthcare. At some point, like climbing up the GINI coefficient, or ever more tax cuts creating a bigger and bigger revenue to spending gaps, just doing nothing will cause major problems down the road anyways.

We can kick the habit and go on a diet and get healthy, or we can say, fuck it. But fuck it doesn't end better. It doesn't end with more freedom. It doesn't end with more growth. Ignoring our problems or insisting they don't exist won't make them go away. We have a terrible healthcare system. It's a fact. Inequality is increasing. It's a fact. The deficit is increasing. It's a fact. The tax cuts exacerbate these problems. Also a fact. They won't pay for themselves. That's another fact.

So change will come. I can't be sure what kind. But doing nothing will still cause it. It's not like I'm worried about that. I'm just flummoxed by the idea that wanting to do anything about these problems--even acknowledging them--gets me labeled a confiscatory communist. I feel like telling some folks that tax cuts are not a good idea is like taking ice cream away from a fat child, and gets me the same reaction. You don't gotta agree with me about how to move forward. But it's the refusal to acknowledge the problem that's the most maddening thing, really.

[vt]

Re: The Left has lost...........

Totally against any rich taking unfair advantage of the system. There are those who compete fairly and those who don't. We need to first close the
loopholes, then look for reform.

There is mention of a 70% tax rate. According to the most recent income tax analysis the top 10% of taxpayers pay over 70% of all the income tax.

https://taxfoundation.org/summary-fe...tax-data-2017/


If you want to take an even greater share from the top 1% I have a proposal. Give them a choice of paying say 10% extra of all their income, or take
an equivalent amount and use it to rebuild our failing infrastructure with some lesser % of tax write offs over a 15 year period.

Give the rich a short list of major national needs and ask which one or ones they want to pay the extra on; that would help enormously. But no write off on any area but Infrastructure.

The problem with government (and some private businesses) is inefficiencies and waste. There are a good majority of government workers that work
very hard and do great things. Too much spending never gets to the poor:

https://www.heritage.org/poverty-and...after-50-years