tag:blogger.com,1999:blog-17232051.post3276422515436349326..comments2024-03-18T22:32:52.802-04:00Comments on Noahpinion: Scott Sumner on taxesNoah Smithhttp://www.blogger.com/profile/09093917601641588575noreply@blogger.comBlogger42125tag:blogger.com,1999:blog-17232051.post-7521051144518620632015-01-05T19:04:35.223-05:002015-01-05T19:04:35.223-05:00"... this by itself is not dispositive"
..."... this by itself is not dispositive"<br /><br />Mandatory reading before it gets worse: https://www.mtholyoke.edu/acad/intrel/orwell46.htm<br /><br />Twice a day, until over-average disease-related bodily uncoldness disbecomes nonnegligible.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-88730787074774300822015-01-02T15:50:19.034-05:002015-01-02T15:50:19.034-05:00To the extent that pre-tax income for the wealthy ...To the extent that pre-tax income for the wealthy is a positional good in itself, taxation does not affect it.<br /><br />To the extent that after-tax income buys positional goods, taxation rescales the competition without (to first order) changing outcomes.<br /><br />To the extent that the wealthy imagine taxation reducing their individual incomes without recognizing the lack of positional effects — that is, to the extend that they just imagine themselves having less money, as if for another, personal reason — they will oppose taxation more strongly than rational self-interest would suggest.<br /><br />Is this confusion ever discussed?EDhttp://notaurlatall.comnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-35033753837052018552015-01-02T03:56:52.806-05:002015-01-02T03:56:52.806-05:00Good observation. Every state, plus D.C., all have...Good observation. Every state, plus D.C., all have overall regressive state & local tax systems, with the exception of Oregon. My CT state/local tax burden is almost 20%, mainly due to my property tax. Whether you have income of 50K or 5M, the overall tax burden is in the low 30's for both. The main difference is, the 50K earner is struggling to maintain a decent standard of living, and to save for the future, while the 5M person has a beautiful standard of living, accumulating more wealth, and complaining about the amount of taxes he pays. Michaelnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-28674925256506161722015-01-02T03:42:00.650-05:002015-01-02T03:42:00.650-05:00If we measured tax burden in terms of raw dollars ...If we measured tax burden in terms of raw dollars paid, you are correct. I prefer to measure tax burden in terms of the percentage of income paid in taxes, and I'm talking about taxation on all levels of government. Remember when Romney looked down his nose at the 47% who had no Federal income tax liability? With all levels of taxation figured in, and most taxes are regressive, many of those 47% people, still had a higher overall tax burden than Romney, when expressed as a percentage of income. Here in CT, we had Tom Foley running for governor, owner of a $10M Greenwich mansion, a jet, a yacht, and a collection of valuable cars. Foley had no income tax liability for '11, '12, and '13, and probably won't be the end of that. I'd bet everything I have that Romney would refer to Foley as being a patriotic Yankee Doodle Dandy. There's welfare for the poor, and there's welfare for the rich. Michaelnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-52970684075357645282015-01-01T16:31:00.866-05:002015-01-01T16:31:00.866-05:00"The only way to make it work would be to aut..."The only way to make it work would be to automatically and proportionally ramp up public spending whenever private spending slowed."<br /><br />Nope.<br /><br />Do you also think that public spending had to be cut everytime private spending increased? If so, why do you argue the NGDP targeting is a left-wing (by which you actually mean pro-state) policy? If not, why not?<br /><br />Imagine if all that was required to cut the size of federal spending was for people to spend more!<br /><br />In fact, of course, the outcome of a slowdown in private spending under NGDP targeting would be, all else being equal, an increase in private spending.W. Pedennoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-7935901592124523022014-12-31T22:37:47.642-05:002014-12-31T22:37:47.642-05:00Am I mad Noah gets paid for trolling in the blogos...Am I mad Noah gets paid for trolling in the blogosphere? He gets paid for this blog? I wasn't aware. Thanks for the (unverified and likely erroneous) information, I guess.<br /><br />Also, it's quite sexist of you to assume a woman (my mom) isn't able to salt the driveway without my assistance. This is the problem with economics, the constant oppression of women..........Noahsensenoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-62293513177801848702014-12-31T22:06:59.607-05:002014-12-31T22:06:59.607-05:00U mad bro that he gets paid for it and you do it o...U mad bro that he gets paid for it and you do it on a voluntary basis like the rest of us? Dont answer that, your mom needs help salting the drive way. Just shake out the tears in your neck beard. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-17125231970447058312014-12-31T09:40:23.065-05:002014-12-31T09:40:23.065-05:00What a clown.What a clown.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-57925983181987852812014-12-31T05:39:59.513-05:002014-12-31T05:39:59.513-05:00First, legally, each employee is guaranteed nation...First, legally, each employee is guaranteed national holidays (I believe average is around 14 days) and vacation time (20 work days is mostly legal minimum, in some professions even 30) with additional days off if employee has to work on weekends and national holidays. So, absolute legal maximum is 45 working weeks in a year, and often a couple less.<br />Most of government employees have no overtime, and lots of companies also allow no overtime. My best educated guess is that at least 50% of employees in Europe have no option to work overtime, and most of others have available less than maximum allowed overtime hours.<br />As far as I know, women (and lately men) on compulsory maternity leave are counted in workforce, they are in their companies' books, they receive regular paycheck (but from government, not employer), medical, social security, pension fund, everything continues as normal. I believe that only extended, up to 3 years leave is counted as sabbatical, as if they are out of the workforce.<br />If I understand US labor law correctly, employees usually have certain number of sick days per year. If they are sick more, tough luck. In Europe, sick leave is available on doctor's orders, for as long ad doctor prescribes it.<br />Some countries, including Germany, have extensive programs for part-time work, mostly aimed at mothers of young children, but in some cases other people can be included. They work 20-odd hours a week, and retain full rights as full-time employees (of course, they get paid for 20, not 40 hours, but medical, pension rights,... they keep). <br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-86185951607874093902014-12-31T05:38:43.483-05:002014-12-31T05:38:43.483-05:00Sumner's point in mentioning the 1950-60s re: ...Sumner's point in mentioning the 1950-60s re: MTRs is the smaller safety net then.<br /><br />It is a serious issue. Unfortunately there's very little thought given to it by people who actually might want to help. The Rs just use it as an argument to dismantle the safety net and the Ds won't touch the issue with a 10-foot pole.<br /><br />What annoys be about Sumner is, being a fairly classical liberal guy, I resent being scolded about classical liberal fundamentals by some nutter running a blog about NGDP targeting. NGDP is one of the most leftist economic projects out there. The only way to make it work would be to automatically and proportionally ramp up public spending whenever private spending slowed. And if the public spending is wasteful and private investment slows as a result, then you've got to ramp up public spending some more to keep to that NGDP growth trend. And at the same time he wants to play the free market fundamentalist? Give us a break, you weird old nut job.<br />Tomnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-64612521835380048092014-12-30T23:34:08.408-05:002014-12-30T23:34:08.408-05:00the person above read Ayn Rand in their teens and ...the person above read Ayn Rand in their teens and due to the flaws in evolutionary biology it stuck with them through their adult life. <br /><br />This is maybe a good reason to not believe in God: He creates vessels capable of being filled with shit.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-75726858872528429022014-12-30T22:34:09.124-05:002014-12-30T22:34:09.124-05:00"Lower income people face a much higher impli... "Lower income people face a much higher implicit MTR than in the 1950s and 1960s."<br /><br /> I also pointed out to Sumner on his blog that I don't see how this helps his case. Probably Krugman would agree and say let's go back to the 50s tax rates. Mike Saxhttps://www.blogger.com/profile/01360689916550576484noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-7519472822707546002014-12-30T16:11:51.926-05:002014-12-30T16:11:51.926-05:00I'm surprised you don't reach the obvious ...I'm surprised you don't reach the obvious conclusion -- taxing rich people leads to means-tested redistribution which create larger MTRs for the poor. So, taxing the rich mainly makes <i>the poor</i> work less. This is a major reason why there's such broad support for the EITC and other attempts to address the high MTRs the poor face.<br /><br />But Greg's original point is valid -- people with high incomes and a large amount of discretion about how much to work feel a large effect from marginal rates, and the studies he cites support this. The effect on the poor is surely much larger, but that's small comfort when you need a brain surgeon and he's gone Galt for the year.<br /><br />Also, note that the US trails only S Korea in hours worked per person. This is almost certainly driven by the greater freedom to contract for labor. We can argue whether the European model of enforced leisure leads to better overall outcomes, but it certainly leads to lower overall incomes.Davehttps://www.blogger.com/profile/11877699517690934530noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-8874044687623766432014-12-30T15:03:46.459-05:002014-12-30T15:03:46.459-05:00I can see what Noah is doing. He is complaining ab...I can see what Noah is doing. He is complaining about Scot by changing the question. Scot talks about the national aggregates, while Noah, all of a sudden, switches to taxing just the rich, even though his original article talked about aggregates.<br /><br />Classy.Krzyshttps://www.blogger.com/profile/15794655390770135247noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-16256452411386246772014-12-30T15:01:22.134-05:002014-12-30T15:01:22.134-05:00were there any of the maximum working times laws o...were there any of the maximum working times laws on the books in the 70's or 60's?<br /><br />All the small issues you mention are precisely that: small.<br /><br />Availablity of overtime is endogenous: affected by wage rates (and hence taxes).<br /><br />Yes, some people work 80-100 in the US, but they are a small minority and do not materially impact the averages.<br /><br />Maternity leaves do not impact any averages, since they are out of the labor force, and sick pay/days are available throughout EU.<br /><br />All the little issues do not explain the central fact : how come with a legal limit of 48 hrs x52 weeks : ca 2500 hrs/year, the Germans, for example, work barely over 1300 hrs/ year.<br /><br />The question remains: what is the source of the divergence?Krzyshttps://www.blogger.com/profile/15794655390770135247noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-40408377515095315752014-12-30T10:47:38.377-05:002014-12-30T10:47:38.377-05:00that picture is absolutely perfect for this blog p...that picture is absolutely perfect for this blog post.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-46167396245652620162014-12-30T09:29:45.449-05:002014-12-30T09:29:45.449-05:00All the current laws date back to the EU directive...All the current laws date back to the EU directive because of the way directives are treated: if some country has for thirty years the law that completely follows new directive, it still has to amend it to include "based on Directive...". Directive from 1993 wasn't created in vacuum, but based on the laws from EU member states. Those labor laws were developing over 2-3 decades.<br /><br />Legal restrictions are not irrelevant, because average in US includes also those who work 80 - 100 hrs/week. Since they are blocked at 40 - 60 hrs/week in EU, total average has to fall.<br />Also, overtime is not always available. It depends more on the employer than on the employee. For those without the overtime, you can use say 37 hrs/week average, giving 1665 hr/yr average working hours, or very close to total average.<br />Many EU countries have special provisions for mothers of small children (well, fathers too, but mothers take it a lot more) where they can work part-time (20-something hours). There is mandatory maternity leave, lasting between 6 weeks and 6 months, and optional, lasting up to 3 years, depending on country. Also, some if not all countries do not have "sick days", but workers go on sick leave when doctor confirms they are sick, and stay there as long as doctor says, even if it's whole year.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-84185249984525696012014-12-30T05:09:38.164-05:002014-12-30T05:09:38.164-05:00There's truth in them there words. Might even ...There's truth in them there words. Might even do Noah good to hear them.jackcieonoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-28682341707883148942014-12-29T21:43:05.592-05:002014-12-29T21:43:05.592-05:00Thanks, Barkley, you said exactly what I wanted to...Thanks, Barkley, you said exactly what I wanted to say.<br /><br />Other than that I agree with all else Noah wrote, in his original article and his reply to Sumner. The higher MTR faced by lower income people is a very important issue, which really really ought to be tackled by somebody who's not just trying to score points for his party. Tomnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-43984806245628698972014-12-29T19:06:36.074-05:002014-12-29T19:06:36.074-05:00By the way, those limits are very far from binding...By the way, those limits are very far from binding. At 48 hrs/week, and say 45 working weeks (excluding 4 weeks of vacation and 3 of holidays), it's still almost 2200 hrs/year upper limit, while the average working hours are something like 1500/year for the eurozone. Hence, all those legal restrictions are irrelevant. Again, the question stands: what happened?Krzyshttps://www.blogger.com/profile/15794655390770135247noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-70269194053064853022014-12-29T18:49:10.336-05:002014-12-29T18:49:10.336-05:00Lots of those laws date back to the EU directive f...Lots of those laws date back to the EU directive from 1993. In other words, well after the big drop.<br /><br />As to the income effect, yes that's exactly what you would expect. If there is income effect, it must work either way on all levels. Yes, there might be a differential in response, but in aggregate it leads to only second order effect. In other words, substitution effect is expected to dominate. In aggregate, not for an individual. This is in fact, the standard assumption in optimal taxation theory. It's a bit surprising that Noah does not seem to realize that.Krzyshttps://www.blogger.com/profile/15794655390770135247noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-4804115294416790202014-12-29T16:23:06.489-05:002014-12-29T16:23:06.489-05:00 ... Second, when you tax people, they are poorer ... ... Second, when you tax people, they are poorer ...<br /><br />Surely he could not be that stupid. Roads, power, clean water, education, medical care, even state and national parks and Social Security and Medicare - somehow all of these seem to add to more than just quality of life, they add to life itself. <br /><br />spelling edit. grrrRLLhttps://www.blogger.com/profile/13850927095383579725noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-37391530865161858492014-12-29T16:21:31.284-05:002014-12-29T16:21:31.284-05:00This comment has been removed by the author.RLLhttps://www.blogger.com/profile/13850927095383579725noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-82484016488053475062014-12-29T14:49:33.611-05:002014-12-29T14:49:33.611-05:00Really rich people. It's how the get to keep ...Really rich people. It's how the get to keep all their stuff.Zachhttps://www.blogger.com/profile/01115366572915518720noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-73075627240858042512014-12-29T11:26:50.107-05:002014-12-29T11:26:50.107-05:00The purported incentive effect would come from mar...The purported incentive effect would come from marginal income(gross income less taxes), not marginal taxes. Given the high income dispersion, we still have very high marginal income per hour.Anonymousnoreply@blogger.com