PK used the following chart to make his point. He uses it as proof that
US citizens pay a low tax rate. Krugman wants us to believe that
because we rank so low on this list we should be more than willing to
accept higher taxes to support that big government "we" all want.
It’s hard to argue with this list and the conclusions that PK draws from it. Let me try. This is the raw data that the chart Krugman used was based on:
First let me point out that the 2009 data for the USA (30.1%) was the
lowest in the 13 years of information presented. This is because the US
was in a recession in 08 and that always means lower tax
receipts. To make a statement, Krugman uses the most opportune data to
support his position. When you look at the past and projected numbers
you see that the US average of ~34% is right in line with Japan, Korea,
Australia and Switzerland.
For me, the most significant error by Mr. Krugman and his chart is that
he deliberately chooses to exclude exactly how high those tax rates are
in the countries he holds up as shining examples. Yes it is true, Norway
Sweden, Denmark, Finland, and France have higher taxes than does
America. But look what they are paying to get to the top of the list.
Respectively 56%, 56%, 54%, 53% and 49% of GDP. Who wants to be on the top of that list? I doubt the folks in Sweden or Denmark are so proud to have made it to the top.
What Mr. Krugman shows up as an example of “what we should do” is
actually a disaster. Mr. Krugman should get his head out of, well,
academia and start talking to Americans of all stripes. Liberals,
conservatives and all the folks in between. He won’t find one that will
stand up and support 50+% taxes on GDP. What may be acceptable in Sweden
is simply not going to sell in America.
If he bothered to ask a few economists what they thought 50%/GDP taxes would do for America he would also get an earful. That is just stupid bad policy.
It shouldn’t surprise us a bit when politicians like Ryan and Obama talk
about numbers and budgets and spin every chart to suit their agenda. It
quite another matter when Nobel economists do it.
Excellent post, Bruce.
Paul Krugman is one of any number of examples of people receiving a Nobel prize and demonstrating they gave up critical thinking from that point forward.
My liberal friends are all excited over a graph one of them found that "demonstates" that Republican Presidents blow up budgets and Democratic Presidents pay them down. They have no answers when I ask, "Why does the graph stop at FY2008?"
barliman
"Why does the graph stop at FY2008?"
........or why is the composition of Congress, which must pass the spending bills before the president can sign them, missing.
It does not matter, they are all usurpers and moochers and have been for decades now.
"Why does the graph stop at FY2008?"
........or why is the composition of Congress, which must pass the spending bills before the president can sign them, missing.
It does not matter, they are all usurpers and moochers and have been for decades now.
I feel the same way about Southern states mooching off the gov't.
Then your inbred retarded forefathers should have let them secede peacefully
My inbred retarded forefathers were in Bavaria and Manchester so....but my taxes are basically supporting the monies for the federal outlays to the people of the southern states and the midwest who rely on defense and crop subsidies supported by the hard work and capitalism NE workers and executives.
Why would you characterize a deliberate action by Krugman as an error? All you are doing is defending his criminal nature via the incompetence argument.
Surely you understand sophists better than that?
I don't even consider it an error, who doesn't know Sweden is at 50 plus percent, thats not his point, in fact including the percentage point difference from Sweden would reinforce Krugman's point, we are not just 5 points lower than them we are way lower than them, and yet they lead decent lives, have decent economies, have disposal income etc ..
Post Hoc Ergo Propter Hoc, eh little doggy? Bark twice if you understand how that's a logical fallacy.
Shades of Freddie Mishkin.
Norway needs the large tax receipts to spend on its miltary adventures around the world.
Indeed,
Norway is a very useful sock-puppet in the hands of the USSA and NATO.
FFS, we even paid tribute to Warlord O-bomba by giving him the Nobel Peace Prize.
Besides appeasing the masters of the universe, these astronomical tax receipts are needed to support our own big government and immensely over-sized bureaucratic system. In addition the excess dough comes in handy for our beloved politicians to uphold high levels of corruption.
LMAO
even if take away defense, at 5 percent GDP, we still get little value for our taxes compared to other countries, including high tax ones
Federal taxes are used to make interest payments to bondholders... period. Bondage payments as it were.
Contrary to what you imply, federal tax receipts are not used to fund any socially beneficial program or project. Rather, these are quite simply interest payments to a globalist nobility. Most egregious is that this interest is being paid on money conjured out of thin air as debt. Not a bad deal if you can get it. Sadly, one typically must be born into the right family to get this deal...
Krugman is an apologist for maintaining the status quo of debt servitude for the masses. If sheeple ever discover just what his role in this confidence game is, the world might become a more dangerous place for him too. Not wishing anyone ill will, just saying I wouldn't want to have to explain this to a bunch of pissed off (and rightly so) New Yorkers *.
* "Americans" may be the more apt term, but the vast majority will never have the opportunity for a physical confrontation.
Hee-hee.
Bruce...
Nice article, but seriously, waste of time. The masses are not smart enough to realize what looting and mooching the most productive does to a nation. Krugman's a modern day Bertram Scudder. His Octopus is heralded by the liberal elite.
Strange, for such a thoughtful guy, Bruce you seemingly punted on this one. To me, a reasonably decent way to look at this would be to see how these high tax countries compare in overall economic results, compared to us. I think its a mixed bag and you could have found at least anecdotal stuff about how bad it is for these countries. Instead, while Bruce is critiquing a Nobel economists, he says we should ask economists what they think of 54 percent taxes.
Well, I think most here at ZH would agree that while mainstream economists might be good tools for certain specific things, we are not overly impressed with their academic prowess, since most of them, with the exception of Krugman and few others, couldn't even see the possibility, let alone the STRONG possibility of the GFC coming, when the rest of simple people saw the debt and housing bubbles as very ominous.
So pardon me if the practical engineer in me comes out, but rather than ask economists, I want to see real world results in these high tax countries.
I'm no economist but I have visited these countries, talked with their people and studied the raw economic stats of these countries. While there are people at all ends of the spectrum, in general it would be very hard for me to see how they are way worse off than us economically, except for their very rich of course. Rather, it seems they are quite better off than us in many ways...but I won't make a big arguement on that because that is a big argument, but just want to point out what Bruce seems to think is automatically a given, that the 54 percent tax burden is horrible and the results from it our horrible eocnomics, is, at a min, not a given. Germany has a higher tax burden than us but its businesses compete quite well in world economy, their workers make high wages, have good benefits, but their general economy still does quite well. Norway we should ignore due to outlier status of oil, Sweden tho also does decently economically, etc
Also, historically in US it is not hard to find decades where our tax burden was higher, not Sweden levels but much higher, so we do no even have to stray to an expirment in another country, we can look and see how our economy performed when 2/3 of the corporations did not avoid taxes, when the top tax rate for the richest was 50-90 percent. Those were not horrible economic times, the middle class did amazingly well at those times, and incomes were very flat..again, very rich did do measurably worse in terms there were less of them and they paid way more in taxes, but its not like there weren't rich successful Americans in 50s, 60s, 70s, 80s all when taxes on them and corporations were higher.
Also, I think Bruce is missing part of Krugmans point, if we put aside 54 percent is the even the ideal mark, but rather just look to the fact that the Tea Partier seem to think that in last few years our taxes have suddenly gotten so much higher than ever before, are at historic highs, and is getting close to former USSR levels, and seem to certainly think we have surpassed socialists levels of Sweden, Denmark, France, Germany...which I think is funny, they condemn Obama for being socialist while we all know even if he was FDR re-incarnated, he could not get us to German, let alone France or Sweden levels of socialism in his biggest dreams. That's funny, a Pres, even with Dem congressional control, at the most liberal moment in US in 15 years, couldn't even talk about doing health care like Canada, let alone doing it like those soviets in the UK, he couldn't even propose a single payer system let alone a completely nationalized one, but he some how is implemently socialism and taxes on the order of Stalin and Lenin. We should talk tax policy, its very interesting but we shouldn't be making decisions based on ignorance and thinking that US is at some sort of peak socialism right now. On tax rates, you could argue Reagan admin taxes were more socialist than Obamas.
There is also something about tax rates and delivery of goods and services I think many ignore when they speak of too high tax rates. There are some costs that are pretty much givens now that most people of any means will incur, health care and eduation being some examples. In US we pay for these through taxes and private spending. So working people and their empolyers are paying for medicare that they will collect when they are old and are paying for current private health care insurance. Current private health care costs, what $15,000/yr?. That is something high tax countries pay nothing for. Also high tax countries kids go to school for free or for very very cheap, so parents don't have to save for college in tax defferred accounts, and their kids don't come out of school 100k in debt. And when everything is paid by govt, thru taxes, they do seem to do a BETTER job of getting value for their money. Most countries with mostly govt health care pay 8 percent of GDP on health care while we pay, between our private and public programs, 16 percent of GDP. Since private spending and govt spending on healthcare in US are about half and halg both our govt spending and private spending are twice as inefficient than other countries health spending.
So,say you taxes are 10-15 points higher but you and your employe save $15 a year in health insurance, you graduated with no student load debt and you do not have to save in 401k for for a decent retirement,nor do you have to save for your kids college....that is a somewhat decent trade off. To regular middle class people, costs are cost, whether its a tax or bill to a private company or savings account. A while many may not agree, we can at least see how govt tax spending can yield more, or at least same, value as private businesses provided services.
Also, if we do ask economists as Bruce suggests, sometimes we find counter intuitive stuff, that in the end makes sense:
bravo for giving me a great read! all too true!
Agree that this post is a waste of time, disagree that it was "nice." It had little to say besides calling Krugman "stupid." It's one substantial criticism fell flat: What difference does U.S. tax rates jogging between 30 - 34 % make when you are comparing them to 56%?
It's not so much about tax rate but what you get for your taxes. The highest taxed countries, the Scandinavian democratic so-called socialists get great public services, social stability, and some of the highest happiness indexes in the world. We get flat-lining and declining wages, among the most hours worked per week, low satisfaction, a 700 billion dollar a year military boondoggle and the largest corporations (i.e. GE) paying nothing for taxes, and in fact, getting tax money back from the government. Not good "returns" in my book.
All this talk about the sheeple and the Jewish puppetmasters, and so little talk about the anti-democratic, anti-free enterprise paymasters who are ripping this country off. Krugman is wrong about so many things, and he is wrong about increased taxes if it still funds the crap it has been funding, but taxes have to be raised over and above simple borrowing.
These taxes should simply be invested in the proper things, not profligacy, not the welfare state, and the military industrial complex, and not bailouts and tax write-offs for the most profitable powerful corporations. It should be spent on actual people and invested in the growth and well-being of this country and the world.
Taxes should, in fact, be wise investment, but trying to leverage wisdom from callow, butt-smooching politicians is like trying to get cogent advice on house-buying from the National Association of Realtors.
Wipe out the defense budget completely and we still have a $1 TRILLION annual budget deficit. Where do you cut next to balance the budget?
agreed, wrote my rant below before reading yours...some same points well made by you
I agree with your last point big time. When they gather regular people in a room, present all sides of a budget issue and then give them actual calculators and budget info available to politicians, they make pretty damned good decisions with good policy wonk reasons for the decisions. They have "polled" people this way, and they can find ways the find acceptable to balance budget, like cutting defense on avegare 18 percent, raising taxes on rich, etc...
I know lots of people think our health care delivery system is preferable to Europe, UK, Canada, but if we told people we if switched our health care system to pretty damn good ones in Germany and France, we could nearly balance our budget on that alone..without other changes or cuts, I think people would at least be interested.
But when we take rational policy issues like this and put them thru the meat grinder of monied up politicians, two senators per state etc, sound bites, culture wars etc...then we get policies that most folks looking at real numbers thoroughly would know are a mess...
Like I have a hard time thinking a smart republican believes privatizing medicare via vouchures will really save money for the same level of health care. Hospitals would love to negotiate with 8 different national plans rather than one, they can say no to one or two, and it has proven that such a setup yields about 7 percent higher costs than single-payer negotiating. Also Medicare Advantage was tried and prove to cost 12 percent more. So it seems the idea is not advance for this stated reason, savings from competition, but rather to limit govt spending, no doubt it does because it puts the risk of higher costs onto the individual, but does anybody really believe it is going to yield cost savings for same level of care when that is disproven...and yet they pitch the idea by constantly saying private competition will save money, like health care market is identical to big screen TVs. And so it goes...
Oh really. Then why did I have a nice chat about our monetary system with a freaking plumber a few days ago. Or have a nice chat about computers with a lady at the checkout line at walmart.
I'm one nihilistic son of a bitch. I like saying fuck you to 60,000 armed dangerous people without a friend or ally in the world. I'm that frikkin crazy. And I just can't find more than 30 percent of the population that is fooled by this shit. It's like they all of a sudden have unbreakable causation detection systems. You know one of those weird snap things where you're playing a game of clue and everybody in the room suddenly knows who to be suspicous of.
You're right. It's a terrible job. But somebody has to do it.
The guy's a blowtard.
Keep up the good work, Bruce.
Krugman is a nasty piece of work, and regularly cherry-picks and misinterprets data to please his masters and confirm the biases of his NYT audience.
Here's a nice debunking of another Krugman trope, that students do better in states that allow collective bargaining for educators:
http://iowahawk.typepad.com/iowahawk/2011/03/longhorns-17-badgers-1.html
I'm not going to read your junk right now but by and large the southern states are the least literate and suck off the gov't teat ,more than the rest of us. Next the midwest. And that's not including subsidies. You slash defense, you kill the south. That's why the GOP doesn't want defense slash. Hopw about instead of junking me someone actually refutes me with an argument that contains facts.
So, you're not going to read my 'junk' but you expect people to refute your 'argument'?
Read the 'junk' and save us all the bother of replying, you lazy ****.
Sounds like you want lower taxes and less welfare. Sign up with the Tea Party and get rid of the parasite enablers like Obama and Pelosi
If I believed that the tea party was serious and not a reaction against obama I would join. If I believed they were serious, I would hear some talk of defense slashing. I don't. except from rand paul, whom i repsect and admire.
How about you go eat the droppings of your favored political totem-animal?
Care to guess why the southern states tend to be the least literate? And score worse on standardized tests?
Here's a hint - it has to do with demographics.
Have fun with that one.
Just keep landing the punches. History will judge him harshly.
Sentient contemporaries have also judged him harshly.
I'd be tempted to laugh in his face upon first introduction but I'm just not that cruel.
If Bruce's commentary was a waste of time, then I suppose the Tea Party was a waste of time too. Even though the President, as a result of the election, is having to at least "acknowledge" that we have a spending problem. Of course by your logic, elected by the masses "not smart enough to realize what looting and mooching the most productive does to a nation."
It's called persistence, persistence, persistence, persistence, persistence, persistence, persistance...................................
Actually, those countries are quite happy to be paying those taxes, on the whole. This applies especially to the Scandinavian countries.
Give this a read
http://www.inc.com/magazine/20110201/in-norway-start-ups-say-ja-to-socia...
Furthermore, those countries are ranked pretty much at the top of every list that matters, including overall happiness, life expectancy, and employment rates.
Although I will say I do not like Krugman either, mostly because of his support for deficit spending and QE. He is a part of the Jewish elite that want to maintain control in this country through government. The reason why government works in Scandinavia is because they do not have a parasitic Jewish elite that use every financial trick in the book to extract from the host population.
I also highly doubt that raising the taxes on the uber-wealthy will have much effect on Paul's Jewish friends. They will likely store their money offshore or simply funnel it into Israeli "charities" for all those nice tax write-offs.
Speaking of mooches....Isn't today the premier of the "Atlas Shrugged" movie?
Yes it is...in my neck of the woods it's Tampa & Jacksonville...not exactly blanket coverage...but it's getting into the major population centers.
Total waste of time. Tea Party, Krugman, and especially this post, which is just blather and really, Bruce, beneath your normal work ... "lower taxes for me, me, me." Really? Is that all you have this evening? Sweden's IKEA is outsourcing manufacturing to North Carolina now - NC - the New China. Swedes live a helluvalot better lives, in every measurable way, even with their high taxes, than 99% of North Carolina residents, especially the ones so damn lucky to be making $8/hr working for IKEA. It's not the tax rates, it's the waste of trying to maintain an oil-fired military-backed empire that burns 700,000 barrels a day on over 800 bases globally and feeds trillions to the pigs who have no other business than sucking off government/military teats ... that's what eats up 50% of the tax receipts ... and that's killing this country. STFU and pay your damn taxes, and then DO something about the priorities - don't repeat this FOX drivel. Shit like this is why blogs get no respect... and this one's especially not deserving of this quality of whining.
18 junks. The political zombies that took over this board don't like you. I could prob post a list of who junked you becuase theses people are so predictable.
I suppose anyone who opposes your politics is a political zombie. Of course you're not one.
I'm not very political but I remember a time when the word libtard was almost never used on this site and it focused soley on economic matters not this us.v them mentality that bascially thinks we live in communist russia. Anyone who thinks this is a socialist country has not seen a socialist country. Unless they mean socialized losses privatized gains, but that's more oligachy. I mean he was junked 18 times for expressing opinion and if you don't see some on this board trying to purge diverse thought you're not seeing the same board I am.
18 junks. The political zombies that took over this board don't like you. Most of em are prob baby boomer feeding off the system ianyhow and dont realize that they are living a socialist lifestyle while "liberals "work for a living supporting them.
Why do those liberals complain about the welfare policies they set up? Keep working to support it
At the risk of being called a racist I think it's reasonable to consider the homogeneous demographics of the 4 Nordic countries at the top. Then consider the quality of the services received for the taxes paid. Imagine a country where the best and brightest choose public service as a career instead of the lawyers, con artists and criminals that run this country.
ummm...Germany was two wholly different countries on two totally different cultural paths for 40 years and they have a huge Turkish population. France has big black/north african population. The days of Europe not have diverse immigration like US are over.
And consider Canada, they are much more socialistic than US, but they have part of country, Montreal that practically wants to secede, they have huge Asian immigrant population on west coast and big Native American population.
But I do think there is race involve in American politics and why we don't have govts more like Canada, France, Germany, Sweden...its because the most consistently conservative, most opposed to unions, most opposed to social safety net, most opposed to higher taxes and more govt service region of our country is the South. Since most the black and latino people in those areas vote Dem, it is the white southerners that most resist US having politically economy like Canada or Germany or France. The high tax, high govt states like Mass never happen in south, southeast.
Two different countries but they are still ethnically and culturally Germans. Same language food and history for 1000 years does not get wiped out by a border for 40 years.
Those high tax high government states like Mass, Illinois, and California are all broke.
What any of this has to do with "the 4 Nordic countries at the top", which are indeed culturally and racially homogeneous, is still a mystery.
But interesting that you bring up the US and race - as you point out the most culturally and racially diverse region of the country (the South, by the way) is the most conservative whereas the nearly homogeneously white northeast and (to a lesser extent) west coasts (esp. outside SoCal) are the most liberal.
Despite the fact that --according to recent poll data-- over 75% of Americans support the pragmatic logic that rich should pay higher taxes, you won't find many bloggers who advocate this position. On the contrary, most bloggers present faulty arguments and cherry-pick bogus data to support the notion that rich should pay even lower taxes.
The blogosphere like the mainstream media has been thoroughly taken over by rich man's lackeys --it's a propaganda machine that turns ideas upside down and holds them as truths. " A bum picking up cans does more work than the bloodsucking elites at the top." But we're told that the parasites at the top represent the most productive segment of our society?
This sort of polling data is utter rubbish unless it is followed with data on how the average American defines rich. It always seems to be some nebulous number like $1m, but while on the stump the pols spin "millionaire" to starts somewhere around $250k, and by the time it is worked into tax and budgetary policy the threshhold for rich is somewhere around $42k.
People like you need to grow up, stop playing with straw-man dolls, and realise that unless your goal is to enslave the masses, taxes need to be reduced across the board because it is counterproductive to keep pointing at the rich as the source of our problems.
there is much more complex polling that shows same thing...some pollsters have gathered people and presented them with complete budget calculators, showing them costs, revenues etc for various programs. They then let them try to balance budget. They invariable cut defense and raise taxes on higher incomes as the biggest means to balance budget. When shown all the numbers, Americans prefer tax structure and govt spending structure that is a lot like that of Bush 1 and Clinton admin, higher taxes on higher incomes, a bit higher taxes for all, no or very little cuts in entitlements, much less spending on Defense, slightly higher spending on infrastructure and higher education. Given the choices and having to prioritize, Americans do chose to tax rich and even middle class before cutting social services, but they are willing to cut defense.
The generic poorly worded polls don't carry a lot of weight in my mind, but the fact that when Americans are shown the options, costs, revenues etc, they chose higher taxes and defense cuts to me is an indication this is true sense of our priorities.
The 'bloodsucking elites' hold their positions courtesy of government. Without a fiat currency and fractional reserve banking, I'd guess 90% of the financial sector's 'profits' (arising from gimmicks that allow them to expand the money supply and take a cut thereof) would vanish.
Increasing taxes on the wealthy won't prevent or even ameliorate this government-created situation.