|Blog >||Login||Register||User Profile||Posts||Topics||Players|
Who could be against that?
The reason the VAT gets so much resistance from the right-wing is that the way it is done in Europe, business are forced to give you a net price only. If they gave you a retail price and added the tax on at POS (like we do with sales taxes in America), people wouldn't slouch into 20% VAT rates, they would be outraged. Same principle applies here.
I thought this was a pretty good article, explaining that Christian sympathy for the poor does not translate into advocacy for the political project of reducing inequality.
Sympathy for the poor does not necessitate envy and hate for the rich. It doesn't even necessitate begging from the rich, let alone taking from the rich by force. It means giving of one's own time, resources, wisdom, and compassion in helping the poor and helping them help themselves.
I have often pointed out the importance of the age-income relation in understanding income inequality. About a third of income inequality is due to age and life-cycle effects, and the greater these effects the better. So income inequality is a mixed bag of good and bad (article on this forthcoming).
So I noted with appreciation the St. Louis Fed's linked article (summary) that came out today about a study they did on income and wealth inequality in the U.S.
The income inequality takeaway was nothing new, apart from a short-hand metric they used to quantify it:
And they measured wealth inequality the same way:
Of course, to those familiar with the literature, there is nothing surprising that wealth inequality (as measured this way or in any way similar to income inequality) is wider than income inequality. However, the summary appears to indicate that this apples-to-apples comparison means that "wealth inequality is a much greater dilemma" than income inequality, which is just not the case. Wealth inequality has been and will always be more pronounced than income inequality. That alone does not make it a greater dilemma.
But I was pleasantly surprised to see the following:
Thank you. Now, can we have the rest of the economics profession apply this same clear thinking to income inequality?
Prof. Don Boudreaux and Liya Palagasvili note a new tack from minimum wage proponents:
And then they skewer them:
What happened was they cherry-picked the data. They found a drop of statistics that favors their cause in a sea of unfavorability ... and then claimed that their opponents were drowning.
Why don't the media do this fact-checking?
Republicans seem to be better stewards of state government, based on their economic performance ...
Winship's analysis of Ryan's plan to break government dependence.
In the critically acclaimed movie Downfall, there is this one scene where Hitler is reviewing the progress of his counter-attacks in the defense of Berlin in April 1945. After several dispiriting reports about Russian advances, Hitler replies, "Steiner's assault will bring it under control." With some reluctance, General Jodl informs him that "Steiner couldn't mobilize enough men, [thus] he wasn't able to carry out his assault." Hitler blows up, ranting and screaming, "That Was an Order!"
The second-hand viewer of such a spectacle is both fascinated and bemused. Fascinated that someone as powerful as Hitler (once was) could expect that wanting or ordering something by consequence necessarily obtains it, regardless of worldly realities. Bemused that, upon realization of this distinction, the expecting person throws a temper tantrum unworthy of even the slightest sympathy.
Now far be it from me to compare Hitler with President Obama, his administration, or his apologists on the left. There are plenty of other instances in history of someone acting in the same way as Hitler did in this movie, it was just one that I remember most. But when the Washington Post publishes pieces like the linked one by Zach Goldfarb, one has a sense of fascination and bemusement that makes one remember such things. The expectation of dictated-command-causing-sheep-effect is not so rare, but never quite so pure.
Goldfarb's article shows the income ratios of various economic strata, first pre-tax, then with the "Bush" tax policy (as applied to 2013 tax rates), then with the "Obama" tax policy (2013). He then claims that, "If you've wondered whether Obama has made any headway at reducing income inequality, here's evidence that he has." Evidence? Oh, because his policy, since become law, says we will tax the rich more! It was so ordered, so it must have happened! Nevermind that policies have behavioral responses, such as less work effort, more tax sheltering, and the like. Or that there are a number of other policies or economic developments that may reduce or increase inequality apart from taxes. Or that there is an entire discipline of economics dedicated to studying and quantifying the intended and non-intended effects of economic policies. According to Goldfarb, we changed a law to reduce inequality, and therefore inequality is less! So it shall be written, and so it shall be done!
Goldfarb then claims that actual inequality (not just inequity in tax law) has gone down under Obama, from 2012 to 2013 (based on a computer model put together by the left-wing Tax Policy Center). But, he admits, "This is still above the ratio in 2009, meaning that after-tax inequality in 2013 was higher than it was 2009." So even though he recognizes that inequality went up under Obama overall, he claims that it went down this past year. The headline for his column is: "Don’t think Obama has reduced inequality? These numbers prove that he has." Like Richard Murphy, he ignores the long-term trend in favor of a single data point. He could have said, "don't think Obama has reduced inequality lately?" which would be somewhat defensible. But he chose not to. The headline he used is totally misleading if not downright false. Don't trust this guy.
Another problem is that income inequality, as measured by the Gini coefficient, has been going up under Obama. The Census bureau number show that: Gini ratios for U.S. households increased from .466 in 2008 (or .468 in 2009) to .477 in 2012, and Gini ratios for U.S. families increased from .438 in 2008 (or .443 in 2009) to .451 in 2012. No numbers yet for 2013.
One last thing. His numbers all show the poor paying about the same taxes and the rich paying a lot more taxes. Who is better off here? No one. But re-distributionists will celebrate the numbers because they hate rich and upper-middle-class people anyway.
I don't doubt that Obama's re-distributionist tax policies will work to reduce income inequality somewhat, for whatever that is worth. But don't try to pretend that the policy's intention is enough to guarantee the policy's result, or that several other factors that result from his bad economic policies may not counteract these, or that Obama's overall record on inequality is positive.
Linked is my friend Michael Cannon's analysis of the ruling and how it may be mis-portrayed in the mainstream media.
Looks like this will go to the Supreme Court (and nothing will happen until then), but this is a significant win for Obamacare opponents and defenders of liberty.
I still like Marco Rubio, but pieces like this really make it look like he's trying to find a way to get government involved, not the other way around.
And it also seems like he has a warped view of "equality of opportunity":
This is the stroy of two Rubios: Tea Party Rubio and Big Government Rubio. The first paragraph is Tea Party Rubio: he recognizes that people have to do four things to live the American dream. But then for some reason in the second paragraph he morphs into Big Government Rubio. Suddenly its that people don't have these things. And, critically, that this means they do not have equal opportunity.
That is leftist talk. They had equal opportunity and did not do one or more of the four things. Then, because of this failure they struggle. But why do they get a reset? Why are now able to claim that their situation without an eduication, without a job, without a spouse, and without children is their starting point, and they want an equal opportunity now?
This is why equality of opportunity is such a dodgy thing to measure. Is it that we all have the same opportunity at some starting point (grade school? high school? 18?)? Or is it that we all have some level or equality of opportunity at any point in our lives, no matter how many mistakes we make?
And there's another thing. Going without one or more of these four things is not even necessarily a mistake. It is a choice. Many would say a bad choice, but a choice nonetheless. There are many reasons why either way could be a good choice, given one's situation. What Rubio is saying is that economically it is a good choice to do these four things the way he encourages. But economics is not everything (did I just say that?). Each individual has to make these choices considering their total impact, including the effects on their economic opportunities at the time and in the future, and then live with the consequences. When government gets involved, either by cajoling people to make one choice or another, or picking up the (economic only) pieces from that decision years later, then we lose the freedom to make the most important choices in our lives, and ceding them to bureaucrats or politicians who have no knowledge of our situation, at best just artificial sympathy.
Copyright © 2014 Anthony Quain
All rights reserved.
Reproduction of material from TonyQuain.com without the expressed written consent of TonyQuain.com is strictly prohibited.
Materials published and opinions expressed herein are solely the responsibility of the author(s) of this site.