Posted on 01/09/2019 6:46:10 AM PST by reaganaut1
...
A large and growing literature continues to support the claim that high marginal tax rates and big tax hikes are harmful to economic well-being. See the work of the Dallas Fed’s Karel Mertens and colleagues, or the Romers’ own 2010 work finding a “highly contractionary” effect from postwar tax hikes.
The theoretical cases for towering “optimal” tax rates that Mr. Krugman cites always tend to trip up over political realities if nothing else. Politicians may find it politically handy to be seen dinging the rich, but they also find it useful to placate the rich by dishing out loopholes. The net result isn’t more revenue. It’s more efficiency-inhibiting economic distortions.
We would also appeal to a simple, real-world intuition. Take Mr. Krugman’s suggested 70% rate on incomes over $1 million. If it were really possible to fatten government spending annually by as much as $650 billion (to use 2016 tax data) without killing the golden goose, we have to believe U.S. politicians would be doing so already.
Ditto Ms. Ocasio-Cortez’s proposal to tax only income above $10 million at 70%, which might theoretically yield $224 billion. Except all evidence suggests that the richest taxpayers are the most diligent about mobilizing lobbyists and politicians to finagle the tax code on their behalf.
The new congresswoman from Queens is to be admired for a plan that would hit her party’s own blue-state voters hardest. But let’s remember why we’re having this discussion. Even $224 billion falls short of the estimated $1 trillion to $2 trillion in annual spending necessary to stabilize atmospheric CO2 by midcentury.
Her defenders will hasten to point out that she speaks only of zeroing out U.S. emissions, albeit by 2030. But U.S. emissions are only a 15% share (and shrinking) of the global total.
(Excerpt) Read more at wsj.com ...
The Democrats’ Latest Idea on Taxes Will Only Help Trump by Tyler Cowen
Krugman on optimal taxes by John Cochrane
What a stupid headline.
High Tax Rates aren’t anything but personal and national wealth killers and poverty triggers.
Evidently, no one has heard of the Laffer Curve.
It’s only been a lifetime.
Alexandra Ocassional-Cortex probably thinks the Laffer Curve is a TV comedy show.
It should be called the Common Sense Curve and not the Laffer Curve.
Krugman is pretty much always wrong.
(Income) taxes are but degrees of SLAVERY (working for the benefit of another)....in violation of the 4th, 5th, 9th, 10th, 13th.
We’re so far down the Socialist slippery-slide, not even the (R)N(C) dare point out the obvious
Krugman is a very smart economist. He’s lying.
DK
If you are not paying the bill, you are the product.
You don’t need a Laffer Curve. You only need half a brain.
I resent the fact that anyone would think that the “optimal” tax rate is the rate that turns the maximum dollar value to the government. To any tax payer, the optimum rate is zero. Anything more than that is confiscation of personal wealth.
.
And the “optimal” land owner will just pay the bill and smile!
Excellent point! Each citizen should be taxed to the extent that he uses government services. That's the only way to be equitable.
But that wouldn't work, would it? Those who require government "services" are generally those who are incapable of generating income or wealth at the time. It's also risky to build up a large tab of back debt to the government.
So, the typical government charges everyone regardless of whether they have or even can benefit from the ostensible government service. This way, Uncle Sam comes out ahead no matter what. The Laffer Curve only puts a practical delimiter on that, although the government is not limited to being practical.
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