NRO: Income Inequality Has Soared While Taxes Have Become Dramatically Less Progressive . . . or Not

https://www.nationalreview.com/2019/10/income-inequality-has-soared-while-taxes-have-become-dramatically-less-progressive-or-not/

The list of good reasons to mistrust The New York Times continues to grow. In the present example, the Gray Lady published some dodgy economics, as if it were reliable.

4 thoughts on “NRO: Income Inequality Has Soared While Taxes Have Become Dramatically Less Progressive . . . or Not

  1. “… the right-leaning Tax Foundation will point to studies showing “that labor bears between 50 and 100 percent of the burden of the corporate income tax,” while the left-leaning Tax Policy Center assigns 60 percent of the burden to shareholders, 20 percent to capital in general (because the corporate tax has spillover effects for other forms of capital), and 20 percent to labor.”

    Assuming I read this correctly, it would seem an even a greater tax burden on the working classes, making the argument that the rich do pay a lower rate. At least according to the Tax Foundation.

    The opinion also bemoans the difficulty in assessing the amount of income hidden, or not declared. Much tougher to do for employees and wage earners.

    I am not convinced NR made a successful rebuttal to the book.

    Liked by 1 person

    1. RE: “Assuming I read this correctly, it would seem an even a greater tax burden on the working classes, making the argument that the rich do pay a lower rate. At least according to the Tax Foundation.”

      What you should notice is that neither the Tax Foundation nor the Tax Policy Center has a reliable estimate. That is, there is no agreed upon standard among economists for measuring who pays the tax on corporate profits and how much (the corporation doesn’t, that much is a given). Thus, the two think tanks use different approaches to develop their estimates, which produce different results.

      Saez and Zucman use yet another different approach. It is one that just happens to serve their narrative. It does so by simply assuming the rich bear zero of the corporate tax burden (far, far less than either of the think tanks assume). Other economists (Tyler Cowen, in particular) have criticized Saez and Zucman harshly for making such a self-serving and unrealistic assumption.

      And this is only one of several major distortions Saez and Zucman indulge in to make their case. As NRO explains, “At every step of the way, Saez and Zucman made decisions that skewed the income distribution toward the top and the tax burden away from it.”

      The NYT should be ashamed of itself for presenting Saez’s and Zucman’s findings so uncritically.

      Like

  2. So we have the opinion of the book, NYT and National Review.

    And you and me, of course.

    I think debating further would require more time, effort and expertise than I have with regards to economics, taxes and databases.

    I am not sure anyone needs to be ashamed, but that is your opinion.

    Liked by 1 person

    1. RE: “but that is your opinion”

      It is more than my opinion. It is NRO’s and that of seven external sources it cited to substantiate its critique.

      Like

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