https://www.wsj.com/articles/tax-cuts-for-the-wealthy-make-inequality-worse-11572561280
The author has some economic “cred”. “Mr. Blinder is a professor of economics and public affairs at Princeton University and a former vice chairman of the Federal Reserve.”
It’s true. The really rich are different. And treated so too. And that might also explain why we can’t pay our bills.
Or more precisely, won’t pay them.
Ironically (not really if one thinks about it) only Democrat presidents in the last 40 years ended their terms with reduced deficits from the time they took office. One had a surplus.
And yet every election, like Charlie Brown trying to kick that football, we are sold on the idea by the GOP that tax cuts pay for themselves and then some.
And just like hapless Charlie, we end up flat on our backs “another day older and deeper in debt”.
Tidewater News and Opinion Forum 
Just a note: We’ve seen economists Saez and Zucman, whose new book Alan Blinder’s WSJ article is based on, here at Tidewater Forum before.
https://tidewaterforum.blog/2019/10/20/nro-income-inequality-has-soared-while-taxes-have-become-dramatically-less-progressive-or-not/
Their work has received a lot of criticism, as detailed at the link, above.
The idea that the “rich” are somehow getting a free ride in the American economy is a staple meme of the Left. It should not be believed unquestioningly.
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“Free ride”. No one who counts as serious says that.
Simply put, we have bills to pay and a lot of debt. If the total tax rate is higher for the middle than the top we are screwing ourselves.
The benefits of being an innovator and entrepreneur in our country is worth paying for. You can get very wealthy in Russia and China too, but piss off the wrong person and pffft, you are outa here. As in dead or gulaged.
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than the top we are screwing ourselves.”
Are we really screwing ourselves? Two things to keep in mind:
a. Saez’s and Zucman’s methodology for computing the tax rate rich people pay has been widely and substantively criticized, as the NRO article documents.
b. A low tax rate on $400,000,000 income per year produces vastly more revenue than a higher rate on, say, $45,0000 income per year. To illustrate, a 1% tax on $400,000,000 would raise $4,00,000, whereas a 15% rate on $45,000 would raise only $6,750. Is that unfair?
If you think it is, then (I hesitate to say) you are making the same logical mistake Karl Marx makes in his argument that capitalists exploit labor by not giving labor a proportionate share of profit.
(Labor is not in fact entitled to a “fair share” of profit because labor’s common contract doesn’t include profit sharing. Instead, the contract provides a different benefit: guaranteed compensation at an agreed-upon rate.)
In other words, “screwing ourselves” is an irrational value judgement, not an economic reality.
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You and Marx again.
Progressive tax rates are the issue. If we just had one rate of 50%, then that would be fair, too, in your logic.
The problem being twofold, however:
Cutting median income in half would be a greater burden than cutting a million by the same amount.
Then, since there are millions more middle income consumers, the economy would suffer as some necessary and most discretionary spending comes to a virtual halt.
That is how we screw ourselves.
A successful free market capitalist economy needs both sellers and buyers. And the balance needs to a heck of a lot more buyers to create wealth at the entrepreneurial level. That is what spurs innovation.
There is a trite saying that to live with the classes you have to sell to the masses. So the smart thing is to have well paid masses. Not because it is fair, but because there is no consumer economy without consumers.
The housing bubble and subsequent recession had a lot of fathers. But one that is overlooked is the debt load that the working and middle classes assumed in a misguided effort to make up for wage stagnation over the same time period that enormous profits were shuffled to the top. The “prosperity” in the years leading up to 2008 was built on a house of cards…credit cards, figuratively and literally (as well as ridiculous home equity debt to finance the same illusion of wealth at the middle) False economic theory of trickle down never happened. Real incomes were not there.
Again, we screwed ourselves. And Marx had nothing to do with it.
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RE: “If we just had one rate of 50%, then that would be fair, too, in your logic.”
Not at all. My logic requires nothing of the sort.
My logic holds that “fairness” is not a valid factor in the discussion. Further, I would eliminate income taxes entirely, if I could, since taxing income (production) makes absolutely no sense as a matter of economics.
RE: “There is a trite saying that to live with the classes you have to sell to the masses.”
There is a reason the saying is trite. It doesn’t really mean anything.
The simple economic reality is that the people with the most money pay most of the taxes. Instead of dreaming up schemes for having them pay more, we should be happy for what they already do, and we should lessen the burden on them when we can (because that gives them more money to share with the rest of us, one way or another).
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