Taxes in the U.S.A.

Daniel Hamermesh: Why is everyone whining about taxes?

The Economist published its annual graph showing total taxes as a percent of G.D.P. for a large number of rich countries.

Not surprisingly, there’s little year-to-year change — and the U.S. is near the bottom. We are a low-tax country; our average tax rate, counting all taxes, hovers above 30 percent.

Why do we hear so many more complaints about high taxes than I hear in the European Union, where taxes are a much higher percentage of G.D.P.? It’s hard to believe our governments are less efficient than European governments — and that we’re getting less bang for the buck than Europeans get bang for their tax euros.

And it certainly is not the case that our taxes are structured so that the average person pays the top rate: The top federal marginal tax rate kicks in much farther up the income distribution in the U.S. than in European countries.

So what is it?

After all, Joe the plumber pays far lower taxes than Josef or José the European plumber does, so why should Joe’s fellow citizens have any sympathy for him?

One economic answer to this question is that we all expect to become rich and don’t want to have very high taxes on our expected large incomes. Yet today, income mobility is no greater in the U.S. than in Europe, so our expectations do not seem rational.

What’s the answer? Are we more selfish than Europeans? Are our governments less efficient?

I think it may have to do with the size and diversity of the United States, our federalist history, and our focus on individualism. Sectionalist, racist, culturalist (is that a word?), etc. sentiments are very real. It is related, I think, to the fact that Congress is very unpopular, but most people like their own congressman. We don't trust Congress to spend money wisely (justly or not I am unsure) because we see all of those "other" congressmen as being blinded by sectional interests and betraying the national interest with OUR money. Think about the bailout package, the farm bill (all of them), the energy bill (likewise) to see some possible justification for this attitude.

European countries, especially the smaller ones, have more homogeneous populations and a sense of national identity that doesn't depend so much on an assertive individualistic temperament. There's a much more collectivist, tight-knit feeling to them (as far as I've seen it). There is also not the large racial aspect of social policy (welfare queen, etc).

These attitudes translate into a policy the puts more emphasis on leisure and stability for the proletariate middle class and less emphasis on making the possibility of an individual getting a shot at becoming wildly rich in an entrepreneurial endeavor less burdensome. Therefore, in Europe there is national health insurance, stronger labor unions, a stronger safety net, less income inequality, more regulation of business but also slower growth and higher unemployment.

FT endorses Obama

FT.com Obama is the better choice

Soelberg is a dork

the life: What You Didn't Know, You Actually Did

No explanation needed :)

More Republicans for Obama

Scott McClellan
Colin Powell
William Neld
Arne Carson

Any Republican who still thinks Bush was a good president take note . . .

FT: Senior Republicans endorse Obama

Should the VP be kept out of Executive functions?

NY Times: Where Does the Vice President Belong?

Interesting chart

Source: The Tax Foundation

I recently saw this chart (hat tip: Mankiw), and I got to thinking, even though I don't really know what I'm talking about (And who cares? Not that many people really read this blog). At one level this bothers me because I believe that everyone should pay some taxes (preferably more than just FICA), more for the psychological effect of everyone sharing the burden than for any real contribution to the budget. I also believe that assistance should come in the form of payments, maybe even calculated in the same way as tax incentives but to some extent bureaucratically and hopefully psychologically separate.

As far as the chart goes, I'd be interested in seeing how much in the change over the years is a result of greater income inequality. And, often, as a way to make large tax cuts for the wealthy politically plausible, small tax cuts for large amounts of people are added, which takes people who pay small amounts of taxes off the tax rolls (this is basically Obama's strategy too as I understand it, except he's raising taxes on the wealthy).

LEAN Act

Even before I read Nudge, I have not just full disclosure in transactions, but obvious slap you in the face disclosure of the most pertinent information that a person should be taking into account (usually the bad side of the deal, since companies' advertisements do a good job of exaggerating the positive). For example, after a short stint as a door-to-door salesman, I wrote a proposal requiring that all contracts, especially those distributed by salesmen, have a prominent box (larger sized text, bolded, different color, etc.) near the place where people sign the agreement stating the fact that the document they were signing was indeed a contract to which they were legally bound for ____ years (maybe even requiring the consumer to fill out the length and initial it) and urging them to read and understand the conditions under which they can cancel.

I thought this was necessary first to prevent lying by salesmen (of which there is plenty), and to make sure that people understand and are reminded of what they are agreeing to, acting as a countervailing force to salesmen's schmoozing aimed at getting people to make decisions that are not in their self-interest. I was mostly concerned with protecting the elderly and the poor and stupid – the prime targets of door-to-door salesmen. The measure seemed inexpensive to implement, and if it turned out that people really were making informed decisions about their purchases then there would be no harm done.

Fast forward to today's NY Times (wow I don't think that makes literal sense at all, but you get the idea) there is an article about prominent calorie disclosure in restaurants. Apparently restaurants in NY are required to post the caloric content of all menu items on the overhead menu and in the menu itself – great idea by my prejudices (or post-judices since I have thought about it a lot and had some experience). But, it is alleged, there is a bill introduced in congress that would allow restaurants to "tuck calorie information at the back of the menu or in a separate brochure".

I'll have to do some more reading on it, but after reading the bill, it doesn't seem to be quite as bad as the author of the article says. The bill requires that calorie information be displayed on the menu board, but the actual menu can just have the information in a separate brochure. I'm interested to see some reasoning behind this distinction, if for no other reason but to confirm or deny my suspicion that my former congressman who introduced the bill , is a lobbyist's whore (like most "moderates" i suspect). [I did support him for Congress back when I lived in his district because Utah needs more Democrats and the man he was running against was . . . well, never mind].

Hillarious

Great videos of McCain and Obama at some charity event (I don't remember what it was, and I can't see YouTube from on-campus housing). Anyway, the link is here.

Powell Endorses Obama

The first book about a public figure I ever read was Colin Powell's biography when I was in the 9th grade. I had a tremendous amount of respect for him then as I do now, despite his caving in to the Bush people over the Iraq war. And, I might add, his sentiments and thoughts about the race are very close to mine.

Marriage

Since some have asked me, here are some quick links that basically show my thoughts on marriage. I'll write a more expansive post later.

http://www.protectmarriage.com/

http://www.preservingmarriage.org/videos.html

Dallin H. Oaks: Same Gender Attraction

Is the McCain campaign inadvertently inciting assassination?

Frank Rich: The Terrorist Barack Hussein Obama

This seems like a bit much, but then I'm also in a very protected environment - about as close to a liberal enclave as you can get in Provo Utah. And there are certainly very few people in the area with enough redneck points to really fall for that "Hussein Obama" terrorist garbage. Plenty of conservatives, but mostly non-involved and certainly not committed Palinites. It'll be interesting to see what happens, though.

Understanding Tax explains the financial crisis

here

Extra! Obama Wins Election

Alaska Inquiry Concludes Palin Abused Powers

This isn't really surprising, but it's still disappointing. I'd like to see at least one important, structural institution that isn't in danger of imminent collapse now that the economy is officially tanking.

The McCain people are unsurprisingly saying that the inquiry is politically motivated. I would be embarrassed too if I were in their shoes, but blaming an inquiry that was ongoing before Ms. Palin's nomination on Obama supporters does not even come close to passing a smell test. This is why serious campaigns normally have a rigorous vetting process that necessarily disqualifies people like Sarah Palin before they're nominated to the Vice Presidency.

If this doesn't finalize the decision of the "swing voters" out there (honestly, who could possibly be undecided at this point?), I don't know what will.

David Brooks on the Culture War

David Brooks: The Culture War Before Palin

Modern conservatism began as a movement of dissident intellectuals. Richard Weaver wrote a book called, “Ideas Have Consequences.” Russell Kirk placed Edmund Burke in an American context. William F. Buckley famously said he’d rather be governed by the first 2,000 names in the Boston phone book than by the faculty of Harvard. But he didn’t believe those were the only two options. His entire life was a celebration of urbane values, sophistication and the rigorous and constant application of intellect.

Driven by a need to engage elite opinion, conservatives tried to build an intellectual counterestablishment with think tanks and magazines. They disdained the ideas of the liberal professoriate, but they did not disdain the idea of a cultivated mind.

Ronald Reagan was no intellectual, but he had an earnest faith in ideas and he spent decades working through them. He was rooted in the Midwest, but he also loved Hollywood. And for a time, it seemed the Republican Party would be a broad coalition — small-town values with coastal reach.

In 1976, in a close election, Gerald Ford won the entire West Coast along with northeastern states like New Jersey, Connecticut, Vermont and Maine. In 1984, Reagan won every state but Minnesota.

But over the past few decades, the Republican Party has driven away people who live in cities, in highly educated regions and on the coasts. This expulsion has had many causes. But the big one is this: Republican political tacticians decided to mobilize their coalition with a form of social class warfare. Democrats kept nominating coastal pointy-heads like Michael Dukakis so Republicans attacked coastal pointy-heads.

Over the past 15 years, the same argument has been heard from a thousand politicians and a hundred television and talk-radio jocks. The nation is divided between the wholesome Joe Sixpacks in the heartland and the oversophisticated, overeducated, oversecularized denizens of the coasts.

What had been a disdain for liberal intellectuals slipped into a disdain for the educated class as a whole. The liberals had coastal condescension, so the conservatives developed their own anti-elitism, with mirror-image categories and mirror-image resentments, but with the same corrosive effect.

Republicans developed their own leadership style. If Democratic leaders prized deliberation and self-examination, then Republicans would govern from the gut.

George W. Bush restrained some of the populist excesses of his party — the anti-immigration fervor, the isolationism — but stylistically he fit right in. As Fred Barnes wrote in his book, “Rebel-in-Chief,” Bush “reflects the political views and cultural tastes of the vast majority of Americans who don’t live along the East or West Coast. He’s not a sophisticate and doesn’t spend his discretionary time with sophisticates. As First Lady Laura Bush once said, she and the president didn’t come to Washington to make new friends. And they haven’t.”

The political effects of this trend have been obvious. Republicans have alienated the highly educated regions — Silicon Valley, northern Virginia, the suburbs outside of New York, Philadelphia, Chicago and Raleigh-Durham. The West Coast and the Northeast are mostly gone.

The Republicans have alienated whole professions. Lawyers now donate to the Democratic Party over the Republican Party at 4-to-1 rates. With doctors, it’s 2-to-1. With tech executives, it’s 5-to-1. With investment bankers, it’s 2-to-1. It took talent for Republicans to lose the banking community.

Conservatives are as rare in elite universities and the mainstream media as they were 30 years ago. The smartest young Americans are now educated in an overwhelmingly liberal environment.

This year could have changed things. The G.O.P. had three urbane presidential candidates. But the class-warfare clichés took control. Rudy Giuliani disdained cosmopolitans at the Republican convention. Mitt Romney gave a speech attacking “eastern elites.” (Mitt Romney!) John McCain picked Sarah Palin.

Palin is smart, politically skilled, courageous and likable. Her convention and debate performances were impressive. But no American politician plays the class-warfare card as constantly as Palin. Nobody so relentlessly divides the world between the “normal Joe Sixpack American” and the coastal elite.

She is another step in the Republican change of personality. Once conservatives admired Churchill and Lincoln above all — men from wildly different backgrounds who prepared for leadership through constant reading, historical understanding and sophisticated thinking. Now those attributes bow down before the common touch.

And so, politically, the G.O.P. is squeezed at both ends. The party is losing the working class by sins of omission — because it has not developed policies to address economic anxiety. It has lost the educated class by sins of commission — by telling members of that class to go away.

Richard Thaler on CNN

Amusing cartoon from The Economist

Here

More good reads on the financial crisis

Paul Krugman: Moment of Truth
Greg Mankiw: How to Recapitalize the Financial System

Preventing Laptop theft

This is a cool utility called Adeona that's worth checking out if you own a laptop.

Hat tip: Freakanomics

Amusing Woot.com post

Probably the most creative sales pitch I've seen . . .

www.woot.com (8. Oct 2008) - Debatable Assertions

Tom: From Belmont Park Racecourse, welcome to the second lap of the 2008 Sierra Mist/Pennzoil Xtreme Race for the Presidency. Two weeks ago, the candidates completed the swimsuit portion of the competition, and are now ready to take questions from the American people. From millions of questions posted on the Internet, there were only maybe two good ones. So we brought in a bunch of undecided voters to ask the same questions that were asked in the last debate, since they all missed it. We’ll start with a question for you, Senator Mac, from Paris London of Rome, Texas.

Paris London, voter: My question is about the economy. Oh my God, what the hell are we going to do? What the hell, man? Somebody, for God’s sake, do something!

Senator Mac: My friend, a lot of Americans are angry, confused, and fearful right now. I should know. I’m one of them. People are hurting, and not just those people who deserve it. Why, just the other day, I paid $6.99 for the very same buffet I used to pay $6.49 for. And that was the early bird special. It’s clear that something, anything, needs to be done, no matter how feckless or ineffectual. So I am instructing my subordinates to suspend my campaign until the next question in this debate. It’s time to get serious, my friends.

Senator Bam: While they’ve been living the high life on Wall Street, all the lowlifes are living on Main Street. Things have been positively 4th Street, but a nightmare on Elm Street. We’ve seen 221 Baker Street turn into 21 Jump Street. But look: the thing we have to do is cut the strings on these golden parachutes. I pledge to you that within two years, I will eliminate not only golden parachutes, but every color of parachute besides the red, white, and blue.

DeLonghi Multi-Position Ceramic Heater: I’ll provide convenient, safe space heating at a reasonable price. Also, all money will be given away free. I mean, we’re the government, right? We can always print more.

Tom: And for our next question, over there in section F, Brad Nair of Bald Mountain, Wyoming.

Brad Nair, voter: Hoo hoo hoo! Section F rules! All right! Listen, Senator Bam, I do a lot of funnycar racing, I run the electric in my house off a gasoline generator, and I drive my SUV from my front door to the garage where I keep my bigger SUV. So the high price of gasoline is really hitting me in the wallet. What are you going to do for me so I don’t have to change my own behavior in any way?

Senator Bam: We’ve got to end our dependence on foreign oil. Every dollar we send to Alberta, Saskatchewan, and other foreign powers gets turned against us in international amateur hockey competition. But look, it’s not going to happen overnight. That’s why we have got to invest in alternative energy sources right now, because we’ve got to recognize that the sun is not going to be there forever. We need to grab that solar power while we can.

DeLonghi Multi-Position Ceramic Heater: The greatest energy resource in America is right under our noses: electricity. I mean, come on: it just comes out of holes in the wall! You don’t need to mine anything or burn anything or whatever. And when it runs out, you just go flip the circuit breaker back. As an electrical appliance myself, let me come out and say that I’m a very strong supporter of electricity. If that makes me unpopular, so be it.

Senator Mac: My friends, let me tell you what my friends – not you guys in the audience, my other friends up here on stage – have really done beyond their fancy rhetoric and correct pronunciations of foreign words. Senator Bam voted 38 – no, 125 – no, 497 times to raise the price of gasoline. Approximately every four seconds, Senator Bam votes to raise the price of gasoline. There, he just did it again. And DeLonghi Multi-Position Ceramic Heater has a secret of his own: he’ll raise taxes on 119% of Americans by an average of 900%, and require each household to offer up two goats and three pecks of turnips. Don’t bother looking in his platform for this. It’s not in there. Fortunately, I overheard him talking about it in the men’s room.

Tom: The next question is to you, DeLonghi Multi-Position Ceramic Heater, and it comes from Dale Glenn of Glendale, California.

Dale Glenn, voter: How can you the American people trust any of the candidates given the varying positions you’ve all adopted over the years?

DeLonghi Multi-Position Ceramic Heater: Thank you for the question, Dale, and thanks for just being you. Dale, I’m proud of my ability to take multiple positions if the situation demands it, Dale. When the American people need a floor heater, I can be a floor heater. But Dale, in times of great crisis that can somehow be helped by me being a tower heater, well, I’m your man, too. Either way, Dale, I provide 1500 watts of radiant, room-filling heat. I don’t think any of the other candidates can say that, Dale.

Senator Mac: My friends, this one talks a good game. But when the time came to stand up for America, he voted for a budget festooned with goodies. And if there’s one thing I hate, it’s goodies. In my day, when we wanted a treat, we soaked a piece of stale bread in castor oil and sprinkled nutmeg on it, with a glass of beet juice on the side. If that was good enough for me, it’s good enough for America. And when I’m in the White House, it will be.

Senator Bam: I’ve never wavered in my commitment to the American people to remain fully committed to the American people. That’s the kind of commitment I’m committed to. But look: we don’t need more of the same policies we’ve seen these last eight years. Reality is not a Choose Your Own Adventure novel, where you can go back and see what would have happened if you’d investigated the sound coming from the crash-landed UFO instead of following the mysterious light into the woods. It’s time for a president with the judgment to choose the right adventure the first time.

Tom: Here’s another question from section F, on the subject of healthcare. Let’s hear from Heather Gray of Pantone, Louisiana.

Heather Gray, voter: I am currently spending all of my income on health insurance for myself and my eight cats. Do you have anything really petty and irrelevant to say about lowering health care costs?

Senator Bam: You’re right, health insurance is too expensive. But look: what I would do is, put your health records online.

Senator Mac: I’ve heard of this “online”, my friends, and it sounds like a great place to store your most confidential, personal information.

DeLonghi Multi-Position Ceramic Heater: I have to agree. Put everybody’s health records on the Internet. To those who object on the grounds of possible breaches of security and privacy, I’ll just say this: ever heard of a little thing called a password?

Tom: I’d like to ask the viewers at home to please, if you’re playing a drinking game, to stop drinking when you hear “my friend” or “but look”, for your own sake and that of your loved ones. Now we’ll turn to foreign affairs. Our next question comes from the Internet, and has to do with Pakistan. Is al-Qaeda up in ur mountns plannin ur massacres, or do all their base belong to Pakistan?

Senator Mac: Pakistan is a real problem, my friends. But the deal is, we have to pretend we like them or we won’t get invited to Bangladesh’s skating party. When it comes to bin Laden, I will stop at nothing to capture him. But if Pakistan asks, you didn’t hear that from me, OK?

Senator Bam: The fact of the reality of the matter is, Osama bin Laden is still out there somewhere. He’s not in Iraq, and he’s not here tonight, so that’s two places we can cross off our list. But look: every breath he takes, every move he makes, every bond he breaks, every step he takes, we’ll be watching him.

DeLonghi Multi-Position Ceramic Heater: I say we stomp him, and then we tattoo him, and then we hang him, and then we kill him.

Tom: The next question will again come from section F, from a Mr. Pladimir Vutin of Moscow, Idaho.

Pladimir Vutin, voter: Thank you in the name of the motherland. Candidates, the mighty Russian empire was bringing light to the darkness of Central Asia when America was just a bunch of naked beaver-trappers with malaria. How dare you lecture one of the most advanced civilizations on Earth about how to conduct her internal affairs?

Senator Bam: The problem was, Putin went down to Georgia, looking for a soul to steal. But look: he paid for it all with Granny’s caviar money. Russia’s laughing all the way to the bank, or wherever they keep their money in that messed-up country. So until we end our dependence on foreign caviar, Russia wins.

Senator Mac: Our friends in Georgia must know that they have friends in us, my friends. That is why I will always, always stand by those brave, brave Duke boys. They’re just good ol’ boys, never meaning no harm. And they’re fighting the system like a true modern-day Robin Hood.

DeLonghi Multi-Position Ceramic Heater: See, the reason the Russians are such jerks is simple: they’re cold. Send a couple hundred million of me over there and see if they don’t kinda let all that Georgia and Chechnya-type crap just kinda slide off their backs.

Tom: And our final question tonight also comes from the Internet, and it has something of a Zenlike quality: what do you not know that cannot be unknown, and when did you know it?

Senator Bam: I’m glad someone has finally asked that. But look: as I travel this nation seeking the votes of Americans, I’m constantly reminded that people need help. Right now, somebody out there has a flat tire. Somebody is trying to reach something on a high shelf, only to find that in America today, reaching high shelves is a right reserved only for the tall. Somebody else has just run out of brown sugar, and may be turning to a neighbor or a relative just to finish the recipe they started. I say, it’s government’s job to give these people a hand. This is the best of America at its worst. This is the highest point of our lowest moment. And it’s time for the beginning of the middle of the end. Thank you.

Senator Mac: Here’s what I know. My friends, our nation faces challenges the likes of which we’ve never seen. The recession. The fuel crisis. The gathering storm over Iran. And the Soviet invasion of Afghanistan. But with a leader like President Reagan, I’m confident that our nation will see its way through the 1980’s in better shape than ever. And if you, the good people of Arizona see fit to elect me Senator, I pledge to always fight for your interests, against the special interests. Not that you’re not special in your own way. You know what I’m saying. Thank you.

DeLonghi Multi-Position Ceramic Heater: Wait, what? What do I know – no, what do I not know? And what, now? I think I missed part of the question.

Tom: Thank you to the candidates, and to the horses of Belmont Park. Good night.

DeLong on the various bailout plans

A good summary I think of the proposals to fix the financial crisis.

Good reads for the day.

Gary Becker: We're Not Headed for a Depression
Economists View: The Bernson Plan
Thomas Friedman: Palin's Kind of Patriotism
Paul Krugman: Health Care Destruction
Peter R. Orzag: Climate Change and Gas Prices

SNL on Bailout

I didn't see this before. It's pretty good.



Hat tip: Mankiw

Election coverage from the Economist.

One of the better articles I've read.

The next few years will be telling . . .

I can't say I don't sympathize with such sentiments.

İyigün Blog - Ron Paul for President! Not that I have completed my transition from a bleeding-heart liberal to an Ayn Rand libertarian (yet). It is only because I am looking to find that beacon who is willing to live and die by his sword called principles.

Unfortunately "principles" get politicians in trouble. When John McCain had principles, he was overwhelmingly defeated by a man without principles but with lots of money and political cronies. And I very much doubt Barack Obama would be so likely to win right now had he not compromised at least a strict interpretation of his principles. I still support Obama, but he had freaking better be the kind of President he said he would be.

I want to believe the President is a good man who is honestly trying to do what's right for the country. I'd rather see one competent and principled Obama term than a repeat of Clinton's basically competent but morally wishy-washy (on several levels) decade. And if Obama turns out to be a Democratic George W. Bush, I'm ignoring politics for the rest of my life and moving to rural Canada after graduation.

Fake News and Reality

It's frightening how accurate fake news has gotten recently.

The VP Debate



The Bailout: Jon Stewart

Finally, a good commentary on the VP debate

Did the mainstream coverage of the VP debate sicken anyone except me? Biden looked great, argued forcefully (and mostly accurately), and was a real class act all around. Sarah Palin sounded like one of those smart-alecky little Disney-channel snots that comes off of the assembly line all too often. Seriously, I have never seen a supposedly serious public event where my proxy-embarrassment reflex kicked in more than during this debate. How can the Republican party take itself seriously when the Vice Presidential candidate so blatantly does not know what she is talking about?

I'm sorry, cutesy little disclaimers ("I may not answer the questions that either the moderator or you want to hear") do not make up for ignorance in real situations. Pushing folksy hot-buttons is not leadership. And for goodness sake winking at the camera doesn't make me think you're clever or charismatic. Anyway, here's the article.