Friday, August 22, 2008

A whole lotta stupid

Ezra on taxes:

Scene: The exterior of a typical American high school on a beautiful, sunny day, near the cafeteria. A young couple sits under a tree finishing their lunch. The boy rests with his head in the lap of his older, taller, girlfriend, who is playing with his hair. A third student, heavyset and bearded, walks towards them, hesitantly, but his approach is met with dual icy glares, and he sinks back towards the school paper lunch table from which he came.
The couple begins to converse.

Ezra claims that we shouldn't try to compete with Ireland and Greece on taxation because . . . "But that's nothing compared the odd idea that we have to kick the legs out of our revenue collection in order to fend off challenges from...Greece and Ireland. Operating costs are cheaper in smaller, less advanced countries, and much cheaper in smaller, much less advanced countries." Ireland is the richest country in Europe, except for Luxembourg, which is basically one big tax-advantaged bank. Its per-capita GDP is nearly as high as America's. In 1980, the year before Ireland cut its corporate income tax, the country's GDP was half the size of America's. I agree--why would we want to emulate soaring growth?
Hear that? A good solution to our economic woes is to have a major portion of the US erupt in religious violence with political undertones, then stop. The economic growth that comes with a lack of local explosions is tremendous, especially if you're also allowed into the EU just before the world financial markets begin moving large amounts of capital out of the US in favor of Europe. That seems practical.*
Oh, wait, she wants to credit Ireland's rebirth to reduced corporate taxes. Fuck you, Megan.
He also argues for narrowing the tax base and raising the rates, though that's probably not how he thinks of it:
I've argued often on this blog that given how much income is concentrated in the hands of the rich, you can cut taxes for the majority of the country, raise taxes on a small slice of wealthy Americans, and raise revenue, even as the average American's tax bill goes down. As Leonhardt argues, the relentless march of wealth accumulation -- the rich getting much richer, year by year -- made this truer in 2008 then it was in 2007, truer in 2007 then in 2006, and a helluva lot truer in 2006 then it was in 1993.
High taxes on a narrow base are about the opposite of optimal tax theory. This is not because economists are mean, cruel people who are primarily interested in serving their corporate overlords, but rather because the narrower the base, and the higher the rates, the more sharply the marginal returns to rate increases diminish.
If you think that made no sense, well, prepare yourself for the most incoherent onslaught of jargon you've ever seen, unless you're Spencer.
...
Actually, I'm not going to bother quoting Megan further, at least not in bulk. Her argument begins with acknowledging
The top 1% of households, about 1 million in all, have about 20% of national income. They've also experienced most of the income gains in the last twenty years.
then she flails about trying to make her readers think making this slice of America give back to the nation which has benefited them so would fuck the economy. Cuz, y'know, back when we taxed the shit out of the rich in the decades following WWII until the Reagan era we didn't have any kind of economic growth as a nation, so if we raised taxes on the rich we'd just go straight into a recess.... .... Look, a pony!
Barack Obama's tax plans probably won't put us there, even with the partial lifting of the payroll tax cap. But Barack Obama's plans do nothing to close the really fairly gargantuan deficit we're staring down--he wants to use the money to fund new spending.
This is true, if you completely ignore Obama's intention to not only end the war in Iraq, but no longer allow it to be a monstrously corrupt process of blatant theft of billions from the public treasury by private hands attached to the body of Dick Cheney and/or his bosses. That might free up some pocket change for the comparatively incredibly inexpensive social programs he's proposing, but Megan's got her fingers in her ears, still, because someone someone suggested making the rich pay back the rest of the nation for affording them the privileges they enjoy. She can't hear us.
And, in the end, remember, if we try to tax the rich
they'll shift their income to more tax advantaged forms, or places. If we try to concentrate all our taxation on the rich, we will quickly reach the limits of our ability to tax.
Better to continue to make taxation primarily a means of draining the middle class for the benefit of military contractors and Chinese banks than inconveniencing the rich by making them move some of their assets in ways that weren't already in their plans. It'd just be rude of us.

*- Megan's commentariat find it to funny forever that I connect the past problems in Northern Ireland with the economic difficulties the independent nation just to its south faced. I wish I had paid more attention when the connection had been explained to me in the past, but I guess I'll just have to go on the instinct that not being near a major center of terrorism and violence is a plus when trying to attract business.
Oh, and y'know, just cuz it might damage your national brand to have your ethnic kinsmen blowing up chunks of the capital city of your wealthy and well-connected neighbor nation. Israel certainly isn't helping the matter, but still, look at how corporations are scrambling to get into Gaza and the West Bank, for example.

Let's see how much I can bait them.

Ireland, the island, is, according to wikipedia, roughly 32,600 square miles in size. That's midway between the sizes of Maine and Indiana, for comparison. Northern Ireland is 1/6th of the island. I think maybe the Troubles were relevant to the whole island, just possibly.

9 comments:

Townleybomb said...

*- Megan's commentariat find it to funny forever that I connect the past problems in Northern Ireland with the economic difficulties the independent nation just to its south faced. I wish I had paid more attention when the connection had been explained to me in the past, but I guess I'll just have to go on the instinct that not being near a major center of terrorism and violence is a plus when trying to attract business.
Oh, and y'know, just cuz it might damage your national brand to have your ethnic kinsmen blowing up chunks of the capital city of your wealthy and well-connected neighbor nation. Israel certainly isn't helping the matter, but still, look at how corporations are scrambling to get into Gaza and the West Bank, for example.


Good save! I am very much persuaded that you are not a fool for having no idea what Ireland is!

brad said...

Hehehehe.
Please stick around n teach me further the errors of my ways. We need for grown up supervision round these parts.

Chad said...

I really wish Libertarians would be a tad more honest and just call themselves something descriptive, Neo-Feudalists.

clever pseudonym said...

I don't think the Troubles had any more of an impact on the Republic of Ireland than it did on mainland Britain. Just like London and Manchester, Irish cities saw a small share of bombings and such, but the "Celtic Tiger" of economic growth started in the mid-nineties, when the conflict was still going on (the Good Friday agreement was voted on until 1998, though that hardly put an end to hostilities. I'd say the Troubles weren't officially "over" until the PIRA/UVF/LVF all disbanded and put their weapons out of commission). A lot of it had to do with an increase in exports, business subsidies, and investments from the EU and the US. At one point, something like 70% of the computers in Europe were assembled in and exported from Ireland. I think a more secular government might have helped as well.

Oddly enough, the Troubles probably attracted more people as tourists (can't speak for businesses) to cities like Belfast and (London)Derry. There were (don't know if there still are; haven't been back in around ten years) these morbid "Troubles Tours" you could take. Kind of like the busses that take you around to points of interest in New York or LA or whatver, except instead of "this is where Marilyn Monroe lived," it's "this is the site where 10 people were killed in an explosion in 1978."

brad said...

Yeah, I guess I'm sort of, maybe mostly, wrong, and CP is right. I thought most of the growth was more recent, and related to the EU and greater corporate activity on the Isle this decade.
I don't think it's unreasonable to suspect businesses were less likely to locate any important outposts there prior to cessation of hostilities, tho.
I probably shouldn't have bothered defending offhanded snark in the first place, but I wanted to see if I could lure any of em over here to take up lodging as a.. voice of opposition.

clever pseudonym said...

Well, you're still nowhere near as wrong as the person who claimed the ROI "suffered none of the violence" of the Troubles. I'm sure people living in Dublin and Monaghan in 1974 would be shocked to learn this; at least the ones who weren't killed, that is.

spencer said...

Has Megan ever heard the phrase "correlation does not prove causation?" And if she has, does she understand what it means?

NutellaonToast said...

She knows that phrase when it comes to evidence that doesn't support her bias, but not when it comes to evidence that does.

roger said...

McCardle's comparison is insane in several ways, since a developing economy will, naturally, increase by a GDP percentage that a developed economy can't match. However, when the economy, like Ireland's, makes a big bet on asset inflation, or, in another words, overpriced real estate, it can shrink fast. Here's the economist link to the current forecast for Ireland. Somehow the low corporate taxes don't prevent it from having a worse economic performance than is projected for the U.S this year, at -0.5 percent, and a slow return - although projections for 2009 are notoriously optimistic at the time.
http://www.economist.com/countries/ireland/
profile.cfm?folder=Profile-Economic%20Data

There's no question that she doesn't know what she is talking about.