41–50 of 94 posts
The fundamental fallacy here is that people respond purely to monetary incentives for work. This may be true for Mr. Mankiw, but it is not a universal truth.
And if you find someone who doesn't respond at all to monetary incentives for work, they probably aren't making $250,000 a year, or anything close.
Earlier quoted context omitted.
A lot of dreaming and fantasy reasoning going on there. A compounding rate of 8% is a false premise to start from. Ask anyone who has figured the lat 20 years into their retirement calculations. A more rational take would be to assume you can't project rates in the future, but if you do the talk you will get money now, which has value now. A bird in the hand. And if he is concerned about what happens to his money aft…
Not just dreaming and fantasy, there's some actual numerical sleight-of-hand going on here. He's taking advantage of people's misunderstanding of compound interest. Exponential growth will ultimately trump all other linear factors, even if the exponent is small. And that's also what makes small differences in that exponent so important (hence why computer scientists go through great pains to reduce complexity of matr…
From what I've seen, some people have an in-born desire to work hard, and some don't. Taxes do not change this. The emphasis on taxes strikes me as a bit of posturing, and a ridiculous one at that. I've never had a single acquaintance say to me, "Yes, I've worked 70 hours a week these last few years, but they are raising nominal rates on my top brackets this year, so I will only work 50 hours a week from now on." Hum…
When figuring the hourly rate, one must take into account not only taxes, but loss of unemployment compensation, earned income credit, etc. There are definitely folks who do this and choose to work less because their net hourly rate is not compelling.
Earlier quoted context omitted.
I'm not a tax expert but how are you sure that the tax burden for this income bracket is not _more_ in the United States? Sweden may have ~60% income tax but how much of the back-end tax finagling occurs in Sweden compared to the United States? Again, it may very well be more than the claimed 90% tax rate. I also realize the professor has a vested interest (for several reasons) in knocking the tax cut expiration. But…
Without doing the research to prove it, I'm going to go out on a limb and suggest that the tax burden on the top 1% of earners in the 26 countries I cited with higher average tax burdens is more onerous than the tax burden on the top 1% of earners in the US, because most (all?) of them have more steeply progressive tax systems. The "complexity" of the US tax system is orthogonal to the issue we're discussing.
Without doing the research to prove it
You'll notice that US/NYC is 21 and US/IL (where I'm at) is 35. You should also notice that many of the >35 burdens have a large VAT/Sales Tax which has less impact on the top 1% of earners.
Again, I'm not an expert in these matters. And, in any giving country the professor may be paying more in taxes. However, to systematically dismiss the tax burden of the United States because we have a low income tax isn't taking the full picture into account.
Earlier quoted context omitted.
I'm not a tax expert but how are you sure that the tax burden for this income bracket is not _more_ in the United States? Sweden may have ~60% income tax but how much of the back-end tax finagling occurs in Sweden compared to the United States? Again, it may very well be more than the claimed 90% tax rate. I also realize the professor has a vested interest (for several reasons) in knocking the tax cut expiration. But…
Without doing the research to prove it, I'm going to go out on a limb and suggest that the tax burden on the top 1% of earners in the 26 countries I cited with higher average tax burdens is more onerous than the tax burden on the top 1% of earners in the US, because most (all?) of them have more steeply progressive tax systems. The "complexity" of the US tax system is orthogonal to the issue we're discussing.
Earlier quoted context omitted.
Not just dreaming and fantasy, there's some actual numerical sleight-of-hand going on here. He's taking advantage of people's misunderstanding of compound interest. Exponential growth will ultimately trump all other linear factors, even if the exponent is small. And that's also what makes small differences in that exponent so important (hence why computer scientists go through great pains to reduce complexity of matr…
Since his whole plan is predicated on giving the income to his kids, he could just gift them the $1,000 as soon as its made and it never gets hit with estate takes. He can now do 12 of these gigs a year ($12,000 a year is the max you can gift without declaring it) and pass it entirely onto his kids.
Earlier quoted context omitted.
Without doing the research to prove it, I'm going to go out on a limb and suggest that the tax burden on the top 1% of earners in the 26 countries I cited with higher average tax burdens is more onerous than the tax burden on the top 1% of earners in the US, because most (all?) of them have more steeply progressive tax systems. The "complexity" of the US tax system is orthogonal to the issue we're discussing.
Without doing the research to prove it http://www.photius.com/rankings/tax_burden_country_ranks_200... You'll notice that US/NYC is 21 and US/IL (where I'm at) is 35. You should also notice that many of the >35 burdens have a large VAT/Sales Tax which has less impact on the top 1% of earners. Again, I'm not an expert in these matters. And, in any giving country the professor may be paying more in taxes. However, to s…
Earlier quoted context omitted.
A few problems with your analysis. - Money that is "socked away" in savings accounts or investment portfolios reenters the economy through lending or through decreasing cost of capital for businesses. - It is inherently better for Mankiw to write articles than it is for starving writers to do so. If anyone derived value from what the starving writer was writing, they would be getting paid for it and therefore not be…
Isn't the problem right now that people aren't spending money, though? Banks have plenty of money to lend (see the TARP and the Fed throwing money at them). Companies have money to spend. Neither are doing anything because the economy isn't churning because people aren't spending their money. They either have no money to spend (the unemployed), or they are saving their money because they don't trust their company to…
Earlier quoted context omitted.
Without doing the research to prove it, I'm going to go out on a limb and suggest that the tax burden on the top 1% of earners in the 26 countries I cited with higher average tax burdens is more onerous than the tax burden on the top 1% of earners in the US, because most (all?) of them have more steeply progressive tax systems. The "complexity" of the US tax system is orthogonal to the issue we're discussing.
AFAIK, Slovakia has flat 19% income tax (including income from dividends and capital gain), so I wouldn't be so sure about US having the least onerous tax systems of all named countries.
This seems like the appropriate comparison to draw, since it's the metric Mankiw himself evokes.
Earlier quoted context omitted.
At some point, the goal of having the "Happiest Possible Greg Mankiw" will have to give way to something like Wildland Fire Management. It is less than honest to suggest that the tax increases we are discussing will be used for things like fire protection. The vast majority of government spending these days is not providing public goods. Police, fire, defense, the CDC and other public goods make up a relatively small…
You're right, I was being cute. However, the dominant component of "people capable of working but who don't wish to" is --- by my casual analysis (please correct me) --- retirees on social security. It's also dubious to suggest that if we drastically cut back on the social safety net that the entire entrepreneurial class would necessarily fare better; many of us[1] would have to redirect our efforts and risk toleranc…
It would not be necessary for young people to fund their parent's retirement, their parents would not necessarily need to retire. A large number of older people are capable of working, and the latest projections suggest that this trend will only increase in the future: