Fiscal Cliff MEGATHREAD: Wile E. Economy falls off, lands in cloud at bottom

[sbr]

 

[sbr]

I was reading a cnn.com article about the Fiscal Cliff and it referenced something I hadn't heard about.  According to the article:

The GOP revulsion over any kind of tax rate increase has stymied deficit negotiations for two years and led to unusual political drama, such as McConnell recently filibustering his own proposal and Thursday night's rebuff by House Republicans of an alternative tax plan pushed by Boehner, their leader.

What the hell is that about?   

Apologies if it has already been discussed here.

[Razgovory]

[Admiral Yi]

 

Nice Syt.

[merithyn]

Crohn's can actually be devastating, if one is unfortunate enough. Thankfully that is not my situation.

I'm well aware of how devastating it can be. I actually ghost wrote an ebook about Crohn's several years ago. However, if you read what I wrote, I said that it's unlikely that Crohn's itself will score you disability. It's the problems that come with Crohn's that makes it debilitating. You'd have to have a pretty severe episode that ended up causing serious damage to qualify, was my point. As I said, I was in pretty bad shape for a couple of years, and still didn't qualify for disability. It's not an easy thing to get.

In any case I was talking about the first "rung" of benefits. Those consist here of a slightly higher ceiling for non-taxable income, payroll tax decreases for an employer and easier access to public jobs. They mean squat for those who don't want to work.

Sad truth is they are needed and should be more easily accessible. Most people I know lost their jobs after the first serious flare up. I'm quite an extraordinary case in that regard.

Luckily, that can't happen here anymore. FMLA helped a lot with that. And most companies have short- and long-term disability insurance now.

[Ideologue]

Serious question: what do you guys think the president means by having the rich pay their "fair share"?  The pre-Bush cut rates as he's pushing for right now, or do you think he has more tax hikes on his mind longer term?

A lot less than a fair share.  Certainly not even Kennedy-era top rates.

[Ideologue]

Well, we have more population, so it stands to reason.

We also keep a lot more people alive at reduced capacity for work.

Although, interestingly, I read somewhere, maybe through Krugman, that life expectancy for below-median income (or something like that) Americans is actually declining.

[Ed Anger]

Serious question: what do you guys think the president means by having the rich pay their "fair share"?  The pre-Bush cut rates as he's pushing for right now, or do you think he has more tax hikes on his mind longer term?

A lot less than a fair share.  Certainly not even Kennedy-era top rates.

I'm rubbing a wad of hundred dollar bills on my crotch, right now.

[Admiral Yi]

A lot less than a fair share.  Certainly not even Kennedy-era top rates.

This is an interesting and illuminating response.  Not because of your preference for a top marginal rate in the 70s (which is to be expected), but rather because most people, when asked a question about what a fair share would be, interpret the question to mean what proportion of total taxation should fall on a certain individual or group, whereas you seem to interpret it to mean what's the fair share of their income that the rich get to keep.

[Ideologue]

A lot less than a fair share.  Certainly not even Kennedy-era top rates.

This is an interesting and illuminating response.  Not because of your preference for a top marginal rate in the 70s (which is to be expected), but rather because most people, when asked a question about what a fair share would be, interpret the question to mean what proportion of total taxation should fall on a certain individual or group, whereas you seem to interpret it to mean what's the fair share of their income that the rich get to keep.

I thought Kennedy's top rate was in the 60s (although, you were right--turns out I was wrong).

I dunno.  That's an interesting way to put it, and does capture my approach nicely; it isn't how I usually think about my opinions on tax policy, so the insight is novel to me.

But it isn't that surprising.  I don't look at fair compensation from a market-anarchic standpoint.  I look at fair compensation first and foremost from a central planner's standpoint.  And from that vantage one asks what is enough to keep the incentive for people to organize labor and capital?  We know from history that a confiscatory top rate does not destroy those incentives (though I do think good arguments can be made that rates in the 70s, 80s and 90s may be too high).

Because that's the function of the rich--they do not expend the labor that creates the goods and services the market demands, though they organize the labor needed to do so; and they rarely directly create innovations that increase productivity, meet nascent market demand, or create new market demand, though they organize the innovators needed to do so--with some exceptions like Bill Gates or Steve Jobs, but even within those exceptions there is usually a phase transition from innovator to organizer.

You can run an economy without them, but they make an economy much more efficient by their efforts.  So I don't begrudge them a good or even a spectacular living, nor power over men.  But there's only so much wealth you can extract from organizing the efforts of others before it becomes both 1)unfair from a moral perspective and 2)socially dangerous.  I.e. 21st century declining America.

Although it's also important to note that I support (what are currently considered) outrageous tax rates (including upon the middle class) because I want the government to do things that are (currently considered) outrageous, like build solar power satellites, anti-ballistic missiles, and wind farms, and fight wars, and fully nationalize whole sectors of the economy like health care and education, and create a Friedmanesque negative income tax, and upgrade our collapsing 1950s-vintage infrastructure.  So it's not merely about hurting rich people, although that is a bonus.  I want the government to take rich people's, and not-so-rich people's, money and do things with it that rich people won't do and can't do, but which benefit everybody.

[Admiral Yi]

But there's only so much wealth you can extract from organizing the efforts of others before it becomes both 1)unfair from a moral perspective and 2)socially dangerous.  I.e. 21st century declining America.

Shelf has valiantly tried to sustain the argument that inequality is bad from a utilitarian point of view, but runs into the road block that the only empirical evidence on his side is that inequality rose before the Great Depression and before Teh Great Recession.  There's also a World Bank report that says inequality might or might not decrease growth.

The reasons you gave are really the heart of the matter.  And it's really one reason, since the risk of social unrest arises from people thinking it's so damn unfair they have to resort to violence.

But if you examine the issue of unfairness, it's either predicated on the assumption that the rich person is taking more than their fair share of a communal resource--here's the American income pie, that guy grabbed too big a slice--or it's simply unhappiness that somebody is enjoying a better outcome than you.  In other words, envy.

There are legitimate arguments about improper ways to amass great wealth--Standard Oil pops to mind--but it seems that most people arguing about inequality are unconcerned about proper and improper ways to earn money.

[Razgovory]

Shelf is a valiant man.

[Admiral Yi]

He's great.

[11B4V]

Serious question: what do you guys think the president means by having the rich pay their "fair share"?  The pre-Bush cut rates as he's pushing for right now, or do you think he has more tax hikes on his mind longer term?

A lot less than a fair share.  Certainly not even Kennedy-era top rates.

I'm rubbing a wad of hundred dollar bills on my crotch, right now.

You ar hence forth dubbed......C-Note.

[The Brain]

Although it's also important to note that I support (what are currently considered) outrageous tax rates (including upon the middle class) because I want the government to do things that are (currently considered) outrageous, like build solar power satellites, anti-ballistic missiles, and wind farms, and fight wars, and fully nationalize whole sectors of the economy like health care and education, and create a Friedmanesque negative income tax, and upgrade our collapsing 1950s-vintage infrastructure.  So it's not merely about hurting rich people, although that is a bonus.  I want the government to take rich people's, and not-so-rich people's, money and do things with it that rich people won't do and can't do, but which benefit everybody.