Posts Tagged ‘Income Inequality’

Greg Mankiw’s Blog: The Progressivity of Taxes and Transfers

July 15, 2012

Greg is a mouthpiece muppet for the plutocracy.

Because transfer payments are, in effect, the opposite of taxes, it makes sense to look not just at taxes paid, but at taxes paid minus transfers received.  For 2009, the most recent year available, here are taxes less transfers as a percentage of market income (income that households earned from their work and savings):

Bottom quintile: -301 percent

Second quintile: -42 percent

Middle quintile: -5 percent

Fourth quintile: 10 percent

Highest quintile: 22 percent

Top one percent: 28 percent

The negative 301 percent means that a typical family in the bottom quintile receives about $3 in transfer payments for every dollar earned.

So, government transfer payments marginally reduce the crushing poverty of the bottom 25%, and you are resentful of this?

The most surprising fact to me was that the effective tax rate is negative for the middle quintile.  According to the CBO data, this number was +14 percent in 1979 (when the data begins) and remained positive through 2007.  It was negative 0.5 percent in 2008, and negative 5 percent in 2009.  That is, the middle class, having long been a net contributor to the funding of government, is now a net recipient of government largess.

So, the middle quintile is negative for the first time ever, during the single greatest recession / stagnation since the 1930’s, and you act surprised?

I recognize that part of this change is attributable to temporary measures to deal with the deep recession.  But it is noteworthy nonetheless, as other deep recessions, such as that in 1982, did not produce a similar policy response.

via Greg Mankiw’s Blog: The Progressivity of Taxes and Transfers.



Occupy the SEC

February 16, 2012

Occupy the SEC.

Krugman, Human Weakness, and Desert, Bryan Caplan | EconLog | Library of Economics and Liberty

February 15, 2012

My comment on Bryan Caplan’s article:

PJR writes:

Why do people (republicans & libertarians) object to government money flowing to poor people who are obviously “irresponsible”?

(1) Is it because they believe that their taxes would be lower if the government stopped helping out the “welfare queens”?

Elimination of welfare (the money that goes to the poor, irresponsible people but not the money that goes to the elderly)will not solve the deficit problem. So if that is how they are looking to lower their taxes, then they need to search elsewhere.

(2) Or are they morally opposed to lazy, irresponsible people getting money from the government?

Moral opposition to lazy, irresponsible people receiving money from the government is not a bad thing. However, lurking in the moral opposition to welfare is an unstated presumption that poor means “lazy and irresponsible.” In the midst of our middle class comforts we have forgotten “[to] not judge a person until you have walked a mile in their shoes.”

via Krugman, Human Weakness, and Desert, Bryan Caplan | EconLog | Library of Economics and Liberty.

Tax the Rich

February 15, 2012

Is the White Working Class Coming Apart?—David Frum – The Daily Beast

February 9, 2012

A conservative bashing a truly ignorant conservative. Best line.

As I looked backward and forward in time, however, I had to face this awkward fact: America became more culturally stable between 1910 and 1960 as it became less economically and socially libertarian. As it became more economically and socially libertarian after 1970, America became culturally less stable:

“The greatest generation was also the statist generation. Like them or loathe them, the middle decades of the twentieth century were an entirely anomalous period in American history. Never had the state been so strong, never had people submitted as uncomplainingly, never had the country been more economically equal, never had it been more ethnically homogeneous, seldom was its political consensus more overpowering.”

via Is the White Working Class Coming Apart?—David Frum – The Daily Beast.

Click here to read Part 2 

Click here to read Part 3

Click here to read Part 4.