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Greg Mankiw: I Can Afford Higher Taxes. But They’ll Make Me Work Less.

nytimes.com

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Re: Greg Mankiw: I Can Afford Higher Taxes. But They’ll Make Me Work Less.

#51

Post by pingswept »

pg wrote: post #46
mikeryan wrote: post #42

Earlier quoted context omitted.

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.

You have to pay estate tax on gifts too. Otherwise rich people could avoid estate tax by giving their assets to their kids before they died.

I believe that is not the case for amounts below $13k. See http://www.nolo.com/legal-encyclopedia/article-30095.html

A less comprehensible explanation is available from the IRS here: http://www.irs.gov/businesses/small/article/0,,id=108139,00....

Re: Greg Mankiw: I Can Afford Higher Taxes. But They’ll Make Me Work Less.

#52

Post by Anechoic »

What I don't like about Mankiw's logic is that he's only looking at part of the picture. He talks about being ble to save $1,000 without taxes vs $523 with taxes. Fine, let's look at the $1,000 - now how much of that $1,000 will he have to spend to fix damage to his car's suspension system caused by crumbling roads? How much will he have to pay for private schools because the public schools suck? How much will he have to pay for home security monitoring because the police and fire fighting services have had cutbacks? How much will he have to pay to repair the water damaged caused when a nearby 50 year-old water main broke and flooded his house?

We can go on and on - there is certainly a cost in paying taxes but there is also a cost in not paying taxes. People seem to forget that an interstate bridge collapsed a few years ago.

Re: Greg Mankiw: I Can Afford Higher Taxes. But They’ll Make Me Work Less.

#53

Post by pg »

pingswept wrote: post #51
pg wrote: post #46

Earlier quoted context omitted.

You have to pay estate tax on gifts too. Otherwise rich people could avoid estate tax by giving their assets to their kids before they died.

I believe that is not the case for amounts below $13k. See http://www.nolo.com/legal-encyclopedia/article-30095.html A less comprehensible explanation is available from the IRS here: http://www.irs.gov/businesses/small/article/0,,id=108139,00....

Yes, there's an exemption. I'm talking about a marginal dollar, as he is.

Re: Greg Mankiw: I Can Afford Higher Taxes. But They’ll Make Me Work Less.

#54

Post by tptacek »

yummyfajitas wrote: post #50
tptacek wrote: post #40

Earlier quoted context omitted.

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…

You are correct - retirees together with the poor (90% of whom don't work full time). 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: http://www.sciencemag.org/cgi/content/summary/329/5997/1287

Spending on SSDI and all forms of welfare is dwarfed by retiree payments.

We likely agree on ratcheting up the retirement age.

This argument plays out like a chess endgame. Can we cut to the chase and acknowledge the tradeoff that's being made? At some level, we as a society are trading units of Mankiw happiness for units of peace of mind about retirement.

We certainly do it inefficiently, and, in particular, we drag alone a whole class of free riders who create a drag on the operation of our local and state governments. But even if we optimized all that away, the same fundamental response would apply to Mankiw's argument.

I am not simply pointing out that "taxes buy stuff" --- though that is also a valid point to make. I am saying that Mankiw ignores an offsetting form of incentive to work and (particularly) take risks: the well-being of our close relatives.

Re: Greg Mankiw: I Can Afford Higher Taxes. But They’ll Make Me Work Less.

#55

Post by [deleted] »

pg wrote: post #46
mikeryan wrote: post #42

Earlier quoted context omitted.

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.

You have to pay estate tax on gifts too. Otherwise rich people could avoid estate tax by giving their assets to their kids before they died.

[deleted]

Re: Greg Mankiw: I Can Afford Higher Taxes. But They’ll Make Me Work Less.

#56

Post by pandafood »

tptacek wrote: post #39
pandafood wrote: post #29

Earlier quoted context omitted.

Most of those other countries have pretty dismal mathematical output. Not only that, but the country with the best mathematical output of the ones you listed is the UK, which I think has the most "American" tax code. Whenever anyone produces a good mathematician, that mathematician seems to always come to the US. There's a reason Terrence Tao didn't stay in Australia. I'm not actually saying that this is because of o…

Mankiw isn't a mathematician; he's an economist. Ranked by impact factor, Europe's universities are indeed outclassed by those of the US (attempt to control that by population and by the radically different systems those institutions operate under). I don't think you can really defend the claim that Europe's academic output is "dismal" compared to, like, the Earth, though.

No, but it is dismal compared to America's, which is what I said. And you said "academics like Mankiw", not "economists like Mankiw." Also, stipulating "by impact factor" seems like a sneaky way of suggesting that that's not a legitimate way to rank. That's fine; it's still true when you rank by "quality of output factor."

Re: Greg Mankiw: I Can Afford Higher Taxes. But They’ll Make Me Work Less.

#57

Post by waterlesscloud »

Anechoic wrote: post #52

What I don't like about Mankiw's logic is that he's only looking at part of the picture. He talks about being ble to save $1,000 without taxes vs $523 with taxes. Fine, let's look at the $1,000 - now how much of that $1,000 will he have to spend to fix damage to his car's suspension system caused by crumbling roads? How much will he have to pay for private schools because the public schools suck? How much will he hav…

Can we please stop bringing police, fire, roads, and schools into every single discussion on taxes?

We all know that's not all governments spend money on. We all know there's a good deal that could be cut before these basic services are cut. We know that, so why do we insist on pretending otherwise?

Re: Greg Mankiw: I Can Afford Higher Taxes. But They’ll Make Me Work Less.

#58

Post by jonallanharper »

Anechoic wrote: post #52

What I don't like about Mankiw's logic is that he's only looking at part of the picture. He talks about being ble to save $1,000 without taxes vs $523 with taxes. Fine, let's look at the $1,000 - now how much of that $1,000 will he have to spend to fix damage to his car's suspension system caused by crumbling roads? How much will he have to pay for private schools because the public schools suck? How much will he hav…

You seem to think that $10 out of $10 in taxes goes directly towards roads, schools, or whatever. In reality, about $2 out of the $10 is actually spent for the those purposes.

$6 out of the $10 is a dead weight loss... completely consumed by government waste and inefficiency. The remaining $2 of the $10 is effectively transferred to bank accounts of politicians & friends via bribes, political donations, and outright theft.

Re: Greg Mankiw: I Can Afford Higher Taxes. But They’ll Make Me Work Less.

#59

Post by tptacek »

pandafood wrote: post #56
tptacek wrote: post #39

Earlier quoted context omitted.

Mankiw isn't a mathematician; he's an economist. Ranked by impact factor, Europe's universities are indeed outclassed by those of the US (attempt to control that by population and by the radically different systems those institutions operate under). I don't think you can really defend the claim that Europe's academic output is "dismal" compared to, like, the Earth, though.

No, but it is dismal compared to America's, which is what I said. And you said "academics like Mankiw", not "economists like Mankiw." Also, stipulating "by impact factor" seems like a sneaky way of suggesting that that's not a legitimate way to rank. That's fine; it's still true when you rank by "quality of output factor."

I chose impact factor because it's easy to look up. I suspect any other reasonable metric will produce similar results. I object only to the emotional word "dismal" here. Europe simply isn't a wasteland of academic economic thought.

Re: Greg Mankiw: I Can Afford Higher Taxes. But They’ll Make Me Work Less.

#60

Post by sshumaker »

Dear Mr Mankiw,

You may be a Harvard economist, I'm glad you're not my accountant! You've gone out of your way to maximize the tax penalties you'll incur in your goal of paying for your children's education. Perhaps you should take that 1000$ and find a decent financial planner. As a starting point, how about just investing in an index fund, taking long-term capital gains, and writing a check to pay for your kids' college?

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