Rising Tide and Dooh Nibor Economics
Two interesting pieces on income inequality in the U.S.:
First – “A Rising Tide that Lifts Only Yachts” by Bernard Wasow of The Century Foundation documents the growing disparity between income and wealth for the rich versus the poor in the U.S. from 1981 to 2000. Since his data does not extend beyond 2000, it does not capture the effects of Bush’s economic policies, which have accelerated this widening gap between the rich and the poor.
Second – Paul Krugman spells Robin Hood backwards to emphasize the reverse Robin Hood nature of cutting taxes for the wealthy, which CBPP reminds us must ultimately be paid for by tax increases on low and middle-income groups.
Of course, Don Luskin has to accuse this simple recognition of the long-run budget constraint as somehow being socialististic by seizing on the stated possibility that the Bush Administration might be cutting government spending. But let’s be honest. It is very unlikely that even a conservative government would find sufficient places to cut government spending unless the Social Security benefits that we pay payroll taxes to finance are substantially reduced. And if we were asked to both continue paying these payroll taxes and finance our entire retirement from private funds, this would be in effect increasing employment taxes to finance a cut in taxes levied on capital income. Interestingly, Luskin acts as if the only tax we pay is the Federal income tax.
If he really believes his rhetoric, I have a deal for him even if it means selling my soul. I will vote for Bush-Cheney but only on the condition that Luskin pay my payroll taxes and my state and local taxes for the next 20 years. I’m sure he won’t mind since these taxes do not exist.