URLs du Jour

2019-10-21

Mr. Ramirez notes a double standard. (Submitted in honor of our Canadian friends holding elections today.)

[Obama Endorses Trudeau]

On to our regularly scheduled programming:

  • I am bugged, like a lot of folks, at the New York Times presentation of a tendentious tax picture aiming to show that the "rich pay lower taxes than you", based on a new book by Emmanuel Saez and Gabriel Zucman, The Triumph of Injustice. At National Review, Robert VerBruggen joins the naysayers: Income Inequality Has Soared While Taxes Have Become Dramatically Less Progressive . . . or Not. There's a lot of propeller-beanie analysis, here's a small sample:

    And here too, beyond problems with the basic data, there are arguments over what to include. A big one — a way that The Triumph of Injustice departs even from its authors’ own previous work — has to do with the tax on corporate profits, which has fallen significantly in recent decades. Since corporations are just legal entities, they don’t really pay these taxes; people do. And there’s a lot of debate over how much of this tax burden falls on corporate shareholders, as opposed to other folks, including workers and customers, who tend to be less wealthy and might benefit if the government didn’t take this money. Faced with this conundrum, the right-leaning Tax Foundation will point to studies showing “that labor bears between 50 and 100 percent of the burden of the corporate income tax,” while the left-leaning Tax Policy Center assigns 60 percent of the burden to shareholders, 20 percent to capital in general (because the corporate tax has spillover effects for other forms of capital), and 20 percent to labor.

    Saez and Zucman’s approach? To assume the entire corporate tax falls on shareholders, and to make this clear only after their number-crunching has been reported as fact in the national media. As the economist Tyler Cowen put it in a scathing post, “no Western fiscal authority I have heard of thinks of tax incidence in these terms.” And as this animation from Kopczuk shows, this new assumption largely explains a big change in the trend for rich people’s taxes even relative to Saez and Zucman’s own approach in a recent paper with Thomas Piketty:

    Bottom line: "At every step of the way, Saez and Zucman made decisions that skewed the income distribution toward the top and the tax burden away from it."

    As noted before, Saez and Zucman are advising Elizabeth Warren's presidential campaign.


  • AEI's James Pethokoukis notes a new innovation by left-coast statists: San Francisco unleashes destructive creation on Silicon Valley. He notes that, despite worldwide attempts to do so, nobody's duplicated the miracle of tech-innovation seen in Silicon Valley. It's hard (probably impossible) to do that top-down!

    But if directly constructing an entrepreneurial tech hub is maddeningly difficult, destroying one might well be considerably easier. And how would one go about doing such a crazy thing? San Francisco appears intent in running an experiment in destructive creation. City officials want to create an Office of Emerging Technology that would give “notice to proceed” to entrepreneurs before they released their products into the wild — assuming, of course, OET thinks the products are expected to generate “a net result is for the common good.” So permits for innovation instead of permissionless innovation.

    So we'll see how that works out for them.


  • Peter Suderman continues to be a voice of Reason on the topic of health care: Medicare for All Is All Democrats Want To Talk About.

    Medicare for All, as proposed by Sen. Bernie Sanders (I–Vt.) and supported by Sens. Elizabeth Warren (D–Mass.) and Cory Booker (D–N.J.), would end the nation's employer-based health care system. In the space of four years, it would implement a fully government-run system that is similar to Canada's but even more restrictive, leaving virtually no room for private insurance. Sanders' plan, according to both independent estimates and Sanders himself, would raise government spending on health care by $30–$40 trillion over a decade. It would also require tax hikes or tax-like fees on the middle class. In terms of both cost and transition complexity, it would dwarf Obamacare.

    Note the not-so-hidden pretext: Obamacare didn't, and is not, working as advertised.

    For statists, the only reaction to the failure of statist policies is: more statism!