Weekend Reading

The Transfer Problem and Tax Incidence
You Better Learn Our Lesson
Lies, Lies, Lies, Lies, Lies, Lies, Lies, Lies, Lies, Lies, Lies, Lies
Subsidies, Spite, and Supply Chains
There's Very Little Welfare Left For Trump To Reform
Economic Might By U.S. Metro Area
The More Guns, Less Crime Scam
Intellectual Property For The Twenty-First Century Economy
Those Luxury Condos Look A Little Drab
Insects Are In Serious Trouble
How Amazon Undermines Jobs, Wages, and Working Conditions
Amazon HQ2 And The Rise of Big-Ticket Megadeals
Big Question For U.S. Cities: Is Amazon HQ2 Worth The Price?

Republicans Punishing The Poor

Taxes

Hot off the press, the latest research from Citizens For Tax Justice:

The U.S Has A Low Corporate Tax

Who Pays Taxes In America?

Deja Vu

Tom Still, at the Journal, has a whopper (and laughable) wish list for business growth. We'll take this steaming pile one turd at a time.

He begins with a defense of tax cuts and the wealthy. He wants us to ignore increasing unemployment, poverty, inequality, wage stagnation, increasing health care costs, declining retirement coverage, amongst the many other hardships the bottom 99 percent face. He finds justification because a select few earning the most also happen to pay a lot in taxes. The funny part is when he states, "They [the rich] already pay their fair share and help keep the economy humming." Indeed, nearly 10 percent unemployment, foreclosures, and increasing poverty - that's humming along.

Next free trade is given boosterism. Here the typical right-wing talking-points are on display. Free trade, no strings attached, is good policy...damn the evidence. Luckily more reasoned analysis is out there - Jobs With Justice and Economic Policy Institute.

The University of Wisconsin system, we're informed, will get the "freedom to manage its own resources." Which means they will be responsible for more of their own costs. Slowly spinning our UW system into a quasi-privatized entity. Again, as is the problem with everything in life for right-wingers, the system has too much regulation from the state. Running the university system like a business will produce much better results. (Yes, I'm trying to hold back my laughter, too.) Just look at how great this privatization scam has worked for the economy.

Now we get to the magical world of venture capital. As I've written earlier, "Josh Lerner, of Harvard, has found the number of exceptional venture capitalists is very small. Harold Bradley, of the Kaufmann Foundation, believes venture capitalists have plenty of money, but allocate it very inefficiently, and therefore should not be receiving additional public dollars with the hope of boosting a local economy. Bradley and Carl Schramm, in an article for Business Week, write that the current focus on fees has promoted start-up flipping rather than nurturing." Another attempt of throwing those well-worn conservative talking-points -- entrepreneurial, venture capital, flexibility, etc. -- out there and seeing what sticks.

Mr. Still would also like Congress to reauthorize the Small Business Innovation Research grant program. This is another area I find so hypocritically disturbing among conservatives. They bad mouth everything about government. They talk of how omnipotent business and the market are. But, for some reason, government money and initiatives are the crucial elements for so much of private sector progress.

It's 2011, but some things never change. Delusions and misinformation are out in full force to start the new year.

For Further Reading:

Incidence of Taxes

Progressive & Regressive Taxation in the U.S.

Wisconsin State & Local Taxes

Wisconsin Tax Exemption Devices

Tax Burden Illumination

Answers to Your Tax Day Questions.

Do the Rich Really Pay Over a Third of Their Income in Federal Income Taxes?

Guilded Age Taxation.

Is "Tax Day" Too Burdensome for The Rich?

Measuring Tax Burden by Progressivity and Social Justice

Two reasons invariably come up when discussing the tax burden: who pays and why they should or shouldn’t pay. “The richest – top 1% - pay a whopping amount of the total as it is. The amount they pay is more than what any other quintile or percentage grouping pays.” Another variation, “The total percentage paid by the top 1% as a whole is the largest. The richest – the top 1% - pay 30 percent of total collections, therefore, they pay more than their fair share.” [Implying that because their percentage paid is higher than the total number (percentage) they represent.]

Conversely, this is wrong for two reasons:

The truest way to measure progressivity/ regressivity or fairness is by one’s percentage of their total income that goes to taxes (tax incidence). This gives the most realistic sense to the true burden taxation imposes upon one.

It is also a matter of social justice. Whether you have $1 million or $1 billion dollars to your name, you’re living pretty well. Increasing the taxes on such a fortunate soul (raking in $1 million per year) by one percent would result in $10,000 [yes, I know, scary redistribution]. Now, don’t you think our neighborhoods, streets, schools and a host of other infrastructural, institutional, and socioeconomic factors would be better if we instead dispersed that $10,000 amongst, let’s say, 5 people, giving them each a $2,000 tax-break infusion? Their burden is eased a bit, they’re happier, they shop for a few more things, and they eat out and spend more money in their local economy [probably at one of the wealthy taxpayers’ establishments].

Or, this increased revenue could allow the government to implement public works projects, with unionized labor, to repair roads and bridges, electric grids and water systems, and to create regional light rail systems, among a host of other environmentally sustainable projects. This could establish good green jobs and pave the way for future growth and development, whilst also helping to prime the pump and get us out of the nasty economic doldrums we're in now.

This was the case during the Great Compression after WWII when a single breadwinner could provide for a family. Growth and productivity soared during this period. And, the U.S. was a shining beacon on the hill, an example for the world.

Business investment has not improved during the latest round of tax cuts. It actually increased when Bill Clinton raised taxes – alongside this the economy boomed. Spreading the wealth seems to be good policy for owners and workers alike. It allows higher levels of demand to be sustained, lessening the volatility of the market, leading to more stable growth. We might have averted our present disaster if we had followed the recommendations of some officials (Sheila Bair of the FDIC and Brooksley Born formerly of CFTC) and tightened regulation over the opaque financial instruments that took strong growth and tried to put it on steroids, ever increasing risk.

It just seems wrong to me that people who have more money than they will ever be able to spend gain no solace from knowing that just having a smaller percentage of income in their account(s) could lead to so many social improvements. Plenty of robber barons (Carnegie, Rockefeller, Gates, Buffett, Soros, Cudahy, Zilber), most in their twilight years, realized they had benefited well from Society’s institutions and were therefore obliged to give back. It is sad the paradigms of greed is good and get all you can have won out over a more peaceful shared prosperity.