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

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

#71

Post by gojomo »

tptacek wrote: post #20
fennecfoxen wrote: post #14

Earlier quoted context omitted.

I like the implied reasoning saying that "Other governments are willing to take a bigger slice of the fruits of your labor, so you have no grounds to complain." Except I don't, actually.

That's not the logic I'm employing, though I see why you think it is. I'd rather point out that those 26 other countries do not appear to suffer a deficit of academics like Mankiw, despite a much stronger incentive for them not to take similar speaking engagements. Of course, the bigger flaw with Mankiw's argument is that it evades the point of those taxes, which is that they buy things that our society has deemed wo…

It's not just 'Mankiw Happiness'; it's 'Mankiw Production'. I might be indifferent to his happiness, but I want him producing.

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

#72

Post by jab »

jonallanharper wrote: post #58
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…

Bullshit. Got a citation for those figures?

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

#73

Post by tptacek »

gojomo wrote: post #71
tptacek wrote: post #20

Earlier quoted context omitted.

That's not the logic I'm employing, though I see why you think it is. I'd rather point out that those 26 other countries do not appear to suffer a deficit of academics like Mankiw, despite a much stronger incentive for them not to take similar speaking engagements. Of course, the bigger flaw with Mankiw's argument is that it evades the point of those taxes, which is that they buy things that our society has deemed wo…

It's not just 'Mankiw Happiness'; it's 'Mankiw Production'. I might be indifferent to his happiness, but I want him producing.

Can we split the difference and call it "Mankiw Incentive"? I say "Mankiw Happiness" because it sounds funny to me, but we're not actually talking about Mankiw Production.

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

#74

Post by Anechoic »

jonallanharper wrote: post #58
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…

You seem to think that $10 out of $10 in taxes goes directly towards roads, schools, or whatever.

I never said anything about the direct allocation of tax dollars.

$6 out of the $10 is a dead weight loss... completely consumed by government waste and inefficiency.

Of course there is waste in government spending, just as there is in private spending (hey, we just can't get around the laws of thermodynamics). But do you have any (reputable) sources to back up your assertion that 60% of government spending gets lost as "waste and inefficiency"?

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

#75

Post by gojomo »

tptacek wrote: post #2

Long story short: Mankiw could take a $1k speaking engagement and, after 30 years of compounding 8% (please pass on stock tips, Mankiw) growth, pass on $10,000 to his children. But because of a battery of taxes, it will only come to $1700. And because he will likely be dead after 30 years, the estate tax will chew up another $700. Therefore, he won't do the speaking engagement. "In effect, once the entire tax system…

In fact, many of those higher-tax countries do export their top academics and entrepreneurs to the US.

None are as populous, large, and diverse as the US -- so each may have an easier time (politically and operationally) centralizing and nationalizing services with consensus support.

But alternatively, why wouldn't we be getting economies of scale which make an equally high tax burden (as a percentage of GDP, which is the measure you seem to be using) unnecessary?

Also, the US is on average wealthier than many of those countries. Why wouldn't tax-funded goods and services -- being as they are for the benefit of people of all incomes -- be inferior goods, whose proportion of income should decrease as a consumer -- in this case, the nation -- becomes richer? We have a lower 'food burden', as a percentage of national income, than many countries -- yet few would argue we must increase that number for our national benefit.

The times of strong growth and high taxes occurred post-WW2, when the US had an uniquely unassailable competitive position, and much of the rest of the world had ludicrously high taxes, too. The whole world moved away from those peak rates; implying we could today have the same "unprecedented" world-beating export economy of the 50s/60s with similar ~70-90% top marginal tax rates would be insane.

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

#76

Post by tptacek »

gojomo wrote: post #75
tptacek wrote: post #2

Long story short: Mankiw could take a $1k speaking engagement and, after 30 years of compounding 8% (please pass on stock tips, Mankiw) growth, pass on $10,000 to his children. But because of a battery of taxes, it will only come to $1700. And because he will likely be dead after 30 years, the estate tax will chew up another $700. Therefore, he won't do the speaking engagement. "In effect, once the entire tax system…

In fact, many of those higher-tax countries do export their top academics and entrepreneurs to the US. None are as populous, large, and diverse as the US -- so each may have an easier time (politically and operationally) centralizing and nationalizing services with consensus support. But alternatively, why wouldn't we be getting economies of scale which make an equally high tax burden (as a percentage of GDP, which i…

You're framing the debate in terms of the immediate postwar economy, but I could just as easily invoke the 1990's.

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

#77

Post by gojomo »

tptacek wrote: post #76
gojomo wrote: post #75

Earlier quoted context omitted.

In fact, many of those higher-tax countries do export their top academics and entrepreneurs to the US. None are as populous, large, and diverse as the US -- so each may have an easier time (politically and operationally) centralizing and nationalizing services with consensus support. But alternatively, why wouldn't we be getting economies of scale which make an equally high tax burden (as a percentage of GDP, which i…

You're framing the debate in terms of the immediate postwar economy, but I could just as easily invoke the 1990's.

Growth in the 90s wasn't 'unprecedented', and the 90s top 39.6% tax rate wasn't 'significantly more onerous' than today's 35% rate, considering the history of rates:

http://en.wikipedia.org/wiki/Income_tax_in_the_United_States...

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

#78

Post by lotharbot »

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....

It's $13k per person (giver and receiver) per year. Additionally, there's a $1 million lifetime exemption (for the giver) which is only cut into once you pass the $13k/year limit.

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

#79

Post by lkrubner »

WalterBright wrote: post #43
lkrubner wrote: post #37

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…

I do know people who figured out their marginal hourly rate after taxes, and decided to cut back their hours worked to stay under that. 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.

Well, like I said, "I suspect this is a rare taste, like people who like yak butter. After all, you have to be willing to spend an inordinate amount of time studying the tax code before you can figure out how changes in work habits will effect your total tax bill over the long term, and few people are willing to make that effort."

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

#80

Post by natrius »

jamesaguilar wrote: post #38
subwindow wrote: post #21

Earlier quoted context omitted.

The problem with the economy right now is not that there isn't enough money to fund corporations, it's that the average person isn't making enough regular income.

Look, I see what you are trying to say. But I don't think anyone knows exactly what the problem with the economy is, and if they did, I would not expect to hear about it for the first time in a comment on hacker news. The average person not making enough income is a symptom of almost every kind of problem that can occur in a free economy, but it is not a cause.

If you're hearing that point for the first time today, then you've been paying very little attention to the discourse about the recession over the past couple of years.
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