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Ike Brannon on Taxes, Income Inequality and Thomas Piketty
Below is a short comment from my friend Ike Brannon of Capital Policy Analytics. Ike is one of the sharpest fiscal analysts in Washington, but also has a litterary bent. We certainly agree on issues related to economic growth and taxes, one reason why I decided to share his comment on author Thomas Piketty. I use my copy of "Capital in the Twenty First Century" as a door stop, largely because the 577 page tome is unreadable, but that does not mean Piketty's work is without influence. As economist and historian Diedre McCloskey notes in her 55-page deconstruction of Capital:
"Reading the book is a good opportunity to understand the latest of the leftish worries about “capitalism,” and to test its economic and philosophical strength. Piketty’s worry about the rich getting richer is indeed merely 'the latest' of a long series back to Malthus and Ricardo and Marx. Since those founding geniuses of Classical economics, a trade-tested betterment (a locution to be preferred to “capitalism,” with its erroneous implication that capital accumulation, not innovation, is what made us better off) has enormously enriched large parts of a humanity now seven times larger in population than in 1800, and bids fair in the next fity years or so to enrich everyone on the planet."
Enjoy,
Chris
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Ike's tax missive, 10 July 2015
In case anyone was wondering where Thomas Piketty stands on the question of massive income redistribution he erases that ambiguity in a New York Review of Books essay that prattles on about the brilliance of British economist Anthony Atkinson’s new book on the topic of inequality.
Am I being unfair with my verb choice here? I don’t think so: After an introduction that places Atkinson somewhere between Keynes and Mahatma Gandhi in the pantheon of liberal heroes (“His contribution to the theory of optimal taxation alone deserve several nobel prizes.” Please.) he gets to the heart of the matter: Thatcher was a twat, Reagan an unfeeling simpleton, and together they unleashed forces that have immiserized the masses in the last three decades. He laments Thatcher’s reducing the top tax rate to a mere 40% as well as the 1986 tax reductions in the U.S. that left the top tax rate at a mere 28%, which--he laments--not even his Democratic successors have seen fit to raise, you’ll be interested to learn.
Atkinson has the elegant solution to what ails Anglo-America: A top rate of 55% over $100,000 and 65% over $200,000, to be used to fund an expansion of Social Security and a massive redistribution. Boosting Social Security is a noble sentiment, the left loves to tell us, but since the New York Times (!!) recently copped to the fact that that the elderly now have a much higher standard of living than the rest of us, maybe such a redistribution won’t accomplish all that its advocates desire.
Peter the Great liked to confiscate successful businesses and put the owners to death: I’m waiting for a sympathetic PBS biography of him to appear lamenting how misunderstood his business philosophy was.
Piketty’s interview last month in the Lunch with the FT (which is almost as much fun as Saturday’s WSJ Review section) is also illuminating: France took about ? of his income last year, which he’s fine with, and he sees no negative economic consequence of a 90% tax rate. He’s one of the few people who’ve been a part of this interview series whom I would definitely not want to dine with. “Bill Gates didn’t invent the computer! He’s not entitled to those billions!” I would rather go hungry than listen to an hour of such tripe.
Here’s a quasi-Turing test to determine who’s being a rational policy wonk and who’s merely a partisan hack: If someone said that a politician is going to do something that will increase both economic growth and income distribution and that, in the thirty subsequent years, the consumption of the median household will nearly double, would you do it? Would you also need to know how it affected the income of the top one percent? If so, why? If the answer were that their income will go up much faster, would that cause you to withdraw support? I know what your answer is, I suspect, since if you didn’t find that notion to be nonsense you’d be reading Jared Bernstein’s diatribes instead of mine, but it’s a good question to put to the nomenklatura.
Why should any of us care what’s happening in the one percent, for that matter? If we looked merely at the bottom 99% and the results showed that incomes were going up and inequality was mildly increasing would that be okay? So what if we parachute dropped a couple million rich families into America?
Thomas Babington Macauley observed the same blockhead logic a century ago when he observed that:
“And yet it may then be the mode to assert that the increase of wealth and the progress of science have benefited the few at the expense of the many, and to talk of the reign of Queen Victoria as the time when England was truly merry England, when all classes were bound together by brotherly sympathy, when the rich did not grind the faces of the poor, and when the poor did not envy the splendour of the rich.”
Ike Brannon is President of Capital Policy Analytics, a consulting firm in Washington DC.
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Their conclusion: No politician has created any value... so they should be able to steal and spend unlimited quantities of funds, and do with it as they please.
Yeah, right. Makes total sense... To a complete moron.
Too bad so many of them exist.
"Piketty’s interview last month in the Lunch with the FT (which is almost as much fun as Saturday’s WSJ Review section) is also illuminating: France took about ? of his income last year, which he’s fine with, and he sees no negative economic consequence of a 90% tax rate."
That is because Piketty is willfully blind to the negative consequences. Hollande had to eliminate France's new 75% top tax rate, when Gerard Depardieu and other wealthy French men left the country. 75% of zero is zero.
Didn't Sarkozy move too?
http://www.dailymail.co.uk/news/article-2266331/Nicolas-Sarkozy-Carla-Br...
“Bill Gates didn’t invent the computer! He’s not entitled to those billions!” I would rather go hungry than listen to an hour of such tripe."
Too bad the author doesn't recognize what Enron and more specifically, Larry Summers and DE Shaw did about a decade and a half ago. The Robber Barons and Cronies going back to the bush era is fucking ridiculous. I'm sure it goes back even farther than that but then again, Al Gore invented the internet and he cashed in too. Fuck you Picketty. Bet he has a facebook page too.
Dup...
Edit: the last 6 years have gotten "progressively" worse. The fascists come both as demo and repub. too many hogs at the trough in a rigged casino.
Gotta be able to pay for that hot fine ass I get to run around on. That shit get's expensive. What's a retirree to do? get senile?...maybe later, right now I'm diggin in to the rewards of my hard work....uh...except I lost it all in the market in the dot com bust.....I thought I was on my way.....I finally realized I was, but I was on the way to the poorhouse!
this is not about "left vs right" or "rich vs poor" or "black vs white"- quite simply, its "old vs young"
The Baby boom ("Me") generation is determined to take all the money for themselves and leave their own children homless and hugry - all throughout the "West" - If youre under 40 the only chance you have for a bright future would be for a total collapse to occur now.
Millenials have no hope of having jobs, careers, families or owning a home. But watch the price of real estate come down 90% and then suddenly there is hope for the future.
The baby boom generation will do everything they can to maintain power and destoy their own children.
"But watch the price of real estate come down 90% and then suddenly there is hope for the future. "
Home prices are not going to come down as long as the Central Bank is willing to add zeros to the end of balances 'til infinity and beyond!' Inflation will come to knock and it will not leave until it has been fed sufficiently. The Fed has nothing left but to print and print they will albiet with computer.
But otherwise there is some truth to your rant, I was born in 1960, lived through all the changes...saw and ranted about a lot of it...no one cares, turn the TV up so they don't have to listen.
I certainly don't agree with much of this article, but.........
- the income tax structure should be subject to a top-to-bottom review.
- it must be realized that those earning over $118,500 receive an immediate 6.2% raise since their earnings above that amount are no longer subject to SS tax.
- I support Bernie Sanders even though most ZH people do not. His utterances make a lot of sense and are completely supported by his record unlike other panderers like Hillary. Bernie Sanders is one of the VERY, VERY FEW politicians who can say that he voted against BOTH the Iraq War AND the TPP. He also has been a long time advocate of the Financial Transaction Tax and would utilize it to rebuild infrastructure and address educational costs.
- He TRULY takes on Wall Street with a record to back it up unlike Hillary. Hey, one should at least listen to him if one is a member of the 99%. Reject him if you must, but not "out of hand" without giving him a fair hearing.
"it must be realized that those earning over $118,500 receive an immediate 6.2% raise since their earnings above that amount are no longer subject to SS tax."
SS was not impletemented as a Tax, but a form of manitory retirement savings. I was intended as a safety net for workers, You're suppose to get back what you paid in SS. However its largerly become a politican slush-fund to by votes with gov't spending. Most of the revenue collected for SS in the past was not used for retirment funding.
Bernie Sanders is a closet communist. His man objective is to the make the gov't, the first an only employer for the entire US.
" would utilize it to rebuild infrastructure and address educational costs"
no comment on Bernie, my sarcasm is aimed a your naive claim that Congress will collect money and then spend it on something because a political candidate says so....jajaja. Priceless...racking up a trillion of debt per year for as long as my old eyes can see you and think Congress is going to do something that would benefit the USA. No effin chance....stop blowin dope.
Bernie is the ONLY one not holding a spot in the clown car. That statement includes the DINO hitlery cliton.
I believe before this is over that Sanders will be "put down" when they realize that he will be elected in the same manner that that last poser got elected, but Bernie is the right guy for the time and the Stazi won't have it. They'll do something to make him dead and make it look like an illness or something.....No way the bitch is going to be thwarated to the destruction of America. Just watch....
The bulk of regulation and taxation in a Western Social "Democracy" today is to facilitate central banks' asset stripping projects
The income tax and IRS reporting requIrements provide a roadmap. The legislative bodies are the vehicle to pass taxation and regulation with specific asset goals in mind.
Immigration gates get opened to drown native opposition to being further raped. Generally the immigrants are promised a piece of what gets passed by the legislature.
The guys making it all happen for the banks make out pretty well.
Thatcher's Twat is on display at the British Museum between the Stone Chopper of Tanzania and the bust of Rameses the Great.