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Trying to Make Progress on Redefining ‘Progressive.’ And ‘Establishment.’

A progressive is someone who makes progress. That’s what I intend to do.

— Hillary Clinton, during last night’s debate.

Clinton also thinks a “conservative” is someone who conserves. Which, she says, also is what she intends to do.

First, though, she intends to redefine the entire Oxford English Dictionary.  Progressive, and presumably then, conservative don’t describe ideology.  Ronald Reagan and the Koch brothers were and are extremely progressive.  So are the five Republican-appointed Supreme Court justices.  And loooads of state legislators and governors.  At least since 2010.

Also, being a member of the political and economic establishment is entirely based on gender.  Literally.  Entirely.  No exceptions. You cannot, by definition of the word “establishment,” be an establishment figure unless you are a male.  This is not the result of gender discrimination; it is the result of the definition of the word “establishment.”

At least if you’re playing Oxford English Dictionary editor and you confuse women with Pavlov’s dogs.

Anyway, it looks like there will be more Dem debates now.  So don’t invest in a new copy of a dictionary until all of them are over.  In fact, I think you should wait until after the Democratic Convention.  Why throw good money after bad?  You’ve already wasted money on the edition you have right now.

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Obama, is he or isn’t he … real?

by: Divorced one like Bush

As we watch the “team” Obama is putting together and the discussions regarding how reflective of progressive ideas they are vs same old, same old, I thought I would add to the hunt for Obama’s true identity. These are comments from his policy positions regarding development of our living environment and the economic relationship. I was keyed to these via a notice I receive from the Smart Growth movement.

Build More Livable and Sustainable Communities: Over the longer term, we know that the amount of fuel we will use is directly related to our land use decisions and development patterns, much of which have been organized around the principle of cheap gasoline. Barack Obama believes that we must move beyond our simple fixation of investing so many of our transportation dollars in serving drivers and that we must make more investments that make it easier for us to walk, bicycle and access transportation alternatives.
Level Employer Incentives for Driving and Public Transit: The federal tax code rewards driving to work by allowing employers to provide parking benefits of $205 per month tax free to their employees. The tax code provides employers with commuting benefits for transit, carpooling or vanpooling capped at $105 per month. This gives drivers a nearly 2:1 advantage over transit users. Obama will reform the tax code to make benefits for driving and public transit or ridesharing equal.

The top 100 metro areas generate two-thirds of our jobs, nearly 80% of patents, and handle 75% of all seaport tonnage. In fact, 42 of our metro areas now rank among the world’s 100 largest economies. “To seize the possibility of this moment, we need to promote strong cities as the backbone of regional growth. And yet, Washington remains trapped in an earlier era, wedded to an outdated ‘urban’ agenda that focuses exclusively on the problems in our cities, and ignores our growing metro areas. Strong cities are the building blocks of strong regions, and strong regions are essential for a strong America….that is the new metropolitan reality and we need a new strategy that reflects it . . .

Obama furthers his argument that type of transportation is important in the overall picture of our living arrangements which relates to the overall quality of our economy.
Responding to Transportation for America’s petition:

We need our next president to lead an initiative to invest in public transit, high-speed trains, places to bike and walk, and green innovation. We need a president with a plan that can put millions to work in jobs that can’t be outsourced, bring down the costs of travel, and create a sustainable infrastructure that will keep America on the cutting edge.

Obama answers:

And I think you’ve identified an important part of the answer as well. Our economy is slowing down, we need to stimulate it. Jobs are disappearing; we need to create new ones. At the same time, our infrastructure is crumbling and we need to rebuild it.
I had already proposed creating a National Infrastructure Reinvestment Bank, funded with $60 billion over 10 years, to expand and enhance, not replace, existing federal transportation investments.
I will invest $150 billion over the next decade in renewable sources of energy to create five million new, green jobs – jobs that pay well and can’t be outsourced; jobs building solar panels and wind turbines and fuel- efficient cars;…
I support Amtrak funding and the development of high-speed freight and passenger rail networks across the country.
As you know, all of these measures will have significant environmental and metropolitan planning advantages and help diversify our nation’s transportation infrastructure. Everyone benefits if we canleave our cars, walk, bicycle and access other transportation alternatives. I agree that we can stop wasteful spending and save Americans money, and as president, I will re- evaluate the transportation funding process to ensure that smart growth considerations are taken into account.

So, he talked the lingo of progressive minded people. Do these statements suggest that the ideology behind his pragmatism is progressive?

If the change we wanted was not to be bull shitted anymore, and the one I’m listening to is talking “change” using lingo, presenting policy plans of what I want, was I wrong to think they were talking no more bull shit? Are those talking like Glen Greenwald correct in that people should not be surprised with Obama’s appointments? Maybe, but then based on the above Obama words, that would mean we (you and I) just plain have to approach our relationship with governing as suspect until proven otherwise. Unfortunately, that means we will always be a day late and a dollar short having never known at the time of the decision if we made the correct one because you can not go by what is said.

Hey, I posted about Goolsbee and even asked if bringing in Jason Furman was a concession to the Clinton/blue dogs, did it mean the DLC kept control of the money issues. Does this mean that the non blog savy voter can not rely on what Obama said? Do you understand what the answer of “yes” means? Are those informing us that we should have known better, also saying that knowing the talk of “change” by Mc Cain et al was bull shit were not real in our understanding of what Obama was saying?

Come-on already! This is like blamming people for the down economy because of their consuming in an economy that is 75% consumption. We’re progressives, for christ sake… We Trust.

Do you know what happens to a person when they can never get a straight, no hidden agenda answer from one they count on? They go nuts.

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Ain’t been no progressiveness since 1980

In this post, Bruno commented and posted this link to reference this statement:

In 2005, the top 1 percent of tax returns paid 39.4 percent of all federal individual income taxes and earned 21.2 percent of adjusted gross income, both of which are significantly higher than 2004 when the top 1 percent earned 19 percent of AGI and paid 36.9 percent of federal individual income taxes.

I assume that the purpose of reporting the data in this way is to invoke a natural sense of fairness to people. That being that one’s share of B should reflect their share of A. That B became “significantly higher” suggests some unfairness. Oh for the humanity of it.

The report could have reported that the top 1%’s tax burden in dollars was 20% higher, however their share of income was 21.8% higher. Now is this fair? Is this fair of the report to have noted the rise of both income and taxes paid in a manor that makes the top1% look as if they are getting unfair treatment and not show that the bottom 99% ‘s income only went up 6.2% but their dollars paid in income taxes went up 7.9%?

How fair is this? All of it? 1980 to 2005 all? Adjusted incomes all?

Well, it turns out this report had a link to an exel file of their data. Perfect! As a dutiful AB’er I took it as my charge to see what that data was really showing. Turns out since 1980, the messing with the tax rates has had some strange effects. Fairness is missing in all of it, even the vaunted Clinton era.

Look at this chart. Notice how the income for the bottom 99% is continuously falling away from the total income. Of course, you can’t miss the top 1% line. Up, up and away (in my beautiful, my beautiful balloon…)

The next chart is of total taxes paid. Notice the similarity. The rising share of total income that becomes income taxes is certainly a function of one’s rising share of total income.

But, the income going up faster than the rise in taxes paid or the taxes paid rising faster than the income is a function of the rates.

This chart may not be to impressive unless you look real close. Look between 1991 and 2000 at the bottom 99%. Do you see that it is rising? This is a period that we are suppose to be considering a symbol of progressive taxation and yet income taxes paid as a percentage of income is rising for the bottom 99% while it is descending for the top 1%. The actual percentages for the 99%’ers start in 1992 at 10.9 and peaks in 2000 at 12.1%. Where as the top 1% go from 25.05% 1992 to 28.87% 1996 to 27.45 2000.
Update, forgot these 2 paragraphs:
Is this what we are to consider progressive taxation? No it is not. The covers blown. We have not had a progressive tax adjustment since we started playing with the code with Reagan. And it hurt more knowing that it was decidedly unprogressive during a term when the president ran as a progressive. It hurts even more because Clinton’s term is being pointed to as a time to emulate. A rise of share of income to the top 1% of 6 points in 8 years and now we see that the bottom got buffaloed in the income tax department too.

The highest total of income collected as income taxes in this series of data was 1981 at 15.76%. Being that Reagan hadn’t started blowing the budget, this could reasonably be considered the amount of money we have to pay to keep the budget in good shape. (That is assuming all other taxes stay the same as 1981. They didn’t.) But NOOOOOOOOOOO. We see us paying less each year until 1990. Only 23.25% was paid to take care of our house that year. The top 1% paid 25.1% of the house needs out of 14% of the income. The rest of us paid 74.9% of the house needs out of 86% of the income.
By 2000 we are paying 15.26% of our total income for the needs of the house. The top 1% is paying 37.4% of the need out of 20.8% of the income. The rest of us are paying 62.6 % of the needs out of 79.2% of the income. Ok, I guess there was some progressiveness here.
But! In 1992 the income per capita for the top 1% was $152,743 and $11,055 for the rest. By 2000 it’s $343,357 and $15,999 respectively. Now I ask you, is this progressive? A 124.8% increase for the 1%’ers and only a 44.7% increase for the rest of us. Remember, this is during the Clinton years!
Since that time, the house has really been starving for attention. In 2005, the year the top is or is not getting screwed (I think the numbers show they are not) we collectively only paid 12.45% of our income to the house needs. We have never paid so little. Well, except for 2003 when we paid 11.9%. Which just happens to be somewhere between the 1999 and 2000 percentage for the share of income paid by the bottom 99%. Yes folks, currently we are trying to fund the house on the same percentage of income that only the bottom 99% use to pay. Or, put another way, we are funding a 304.2% (BEA table 3.1 1981 to 2005) increase in house needs on only a 234.3% increase in payments to the house while the total source has increased 319.2%. That’s 260.2% (awfully close to the house needs rise) for the bottom 99 and 970.3% for the poor souls burdened with 39% of the house needs.
Let me be blunt: This all sucks. Just plain sick and tired of having my head played sucks.

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Opus 1, Second movement: On taxation

“Servers, labourers, and workmen of different kinds make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed cloath, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, cloathed, and lodged.”

I left off with a statement which suggested taxation for a progressive purpose, for redistribution purposes is an issue of reason and not mechanics. That is not to say understanding the mechanics is not necessary. Such knowledge however can only be the means to achieve the goal but, not the reason for the goal. Mr. Avi-Yonah sets up his second phase of discussion by quoting Does Atlas Shrug editor Mr. Slemrod:

“ [h]ow much and how to tax high-income individuals are questions at the core of many recent proposals for incremental as well as fundamental tax reform. The right answers depend in part on value judgments to which economic analysis has little to contribute.

Let me give a little bit of my philosophy here. A long time ago I figured out that in the end, after all the pros and cons are lined up, the research is done, the discussion had, the reason anyone does anything is because they wanted to do it. Why did I do X? Because that is what I wanted to do – period. Decisions are made based on values held at the time of decision not on changing values during the decision. Secondly, I am only as free as I allow you to be. Before someone starts thinking “libertarian talking here”, I understand that if in my freedom I accumulate enough money such that you have to rent a toilet from me verses buying your own, I’m not free because now I have to make sure the toilet is always available at the time of your need. If I don’t accommodate your timing, then I am at risk of retaliation by you (and maybe a few of your friends).

I have presented in the past that the goal of our economy is defined in the Constitution:

We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

Specifically but not exclusively “domestic tranquility”, “general welfare” and “posterity”. An economy has been developed to serve our purpose. In the crudest terms of economic purpose; to create capital, as in “a company exists to create profit”. But for me, the crude answer begs the question: why create capital? Because I want to… because of my values. I see taxation as how money comes into play in meeting the goals as stated.

Mr Avi-Yonah starts the second part of his argument with a review of other lawyers’ work concerning the question of progressive taxation:

…Walter Blum and Harry Kalven published a classic article entitled The Uneasy Case for Progressive Taxation. [They] used most of the article to demolish systematically all previous arguments for progressivity made in the name of “ ability to pay” and “ equal sacrifice.” …they concluded that any remaining case for progressivity must be made in the name of redistribution, or an inherent objection to social inequality,…This is the same type of “ aesthetic” argument that motivated Henry Simons’s oft- quoted conclusion in Personal Income Taxation (published in 1938 at the height of New Deal progressivism) that sharply graduated rates are defensible only because there is something inherently “ unlovely” about inequality.

Next up was the introduction in 1987 by Joseph Bankman and Thomas Griffith of optimal tax theory “developed by economist James Mirrlees”. Mr. Avi-Yonah describes the theory as:

“Optimal tax theory seeks to answer the following question: Given that income taxes generate a disincentive effect on work, what is the ideal tax and transfer system if the ultimate goal is to maximize the sum of the utilities of individuals with identical preferences?

As described here, considering the findings suggested in the first post, there is a problem with the assumption. At least as it relates to the tippy top of the earning pile. Googling “optimal taxation theory” will bring up lots of information so I leave more in-depth discussion to you. Surfice-it-to-say, there are issues with the theory when one like Mr. Avi-Yonah is looking for reasoning in support of progressive taxation. He quotes Larry Zelenak and Kemper Moreland:

Regardless of the results of any simulation, optimal tax analysis can never prove that the income tax should have progressive marginal rates. Even if a simulation indicated gradual rates were optimal, and even if the simulation’s factual assumptions were unassailable, an opponent of progression could still dismiss the results by rejecting the philosophical basis of the simulation. If the premises of the simulation are utilitarian or Rawlsian, no amount of sophisticated mathematics will convince someone who objects to those premises.

He continues:

Fundamentally, the problem with optimal tax theory is that, like any welfarist theory, it focuses completely on the well-being of individuals.

Before we go further, let me introduce you to this paper: Taxes and Torts in the Redistribution of Income by David A. Weisbach, THE LAW SCHOOL THE UNIVERSITY OF CHICAGO

He puts the issue of law vs economics as a bases for redistribution discussion thusly:

The thesis is that the presence or absence of the tax system completely changes how one thinks about basic subjects.

The reason why this is so is because the tax system plays a central role in the redistribution of income or wealth. In thinking about legal rules, we must ask whether they should be designed to redistribute or whether they should merely be efficient…Taking these arguments altogether, the double distortion argument and the problems with contracting around and haphazardness, I believe the case against using legal rules to redistribute to the poor becomes almost overwhelming. The tax system is a dedicated system designed to measure the variables relevant to redistribution and act only on those margins. It is hard to imagine that legal rules are likely to do a better job. One key point to note is that I have not argued that legal rules should be efficient. All the argument has shown so far is that legal rules should not be used to redistribute income.

But income is not the only source of inequality. Race, gender, disability, or health all mightbe sources of inequality in our society. If we value equality of all sorts not just income equality, we might want to redistribute based on other sources of inequality.

We are talking 2 different aspects of equality and redistribution as the morality applies to life. One concerns our relationships to each other as individuals exclusive of money. It is nature. It is the place for law. The other concerns our relationship inclusive of money. It is a human added event to nature. Money is based on value which is from our inherent concept of values, but I argue that there is no inherent concept of money. All else being equal, money is the only thing that can create an inequality not found in nature. There is nothing that can substitute for money when trying to equalize the effect of money. This is the place for taxation. I believe the conflating of these two distinct relationships becomes the means to argue against redistribution/progressive policy related to income. The conflation is in denying that collectively we have agreed on, consequently assigned the properties of money within the scheme of life unlike an event of nature.

Mr. Avi-Yonah leads into his reasoning in support of progressive taxation with:

A society is a community with a shared culture and shared interests that transcend the interests of its individual members and extend back to its historical roots and forward into its future. Thus, it is necessary to look for affirmative reasons for taxing the rich that are rooted in a broader social and historical understanding of the vital function of taxation in maintaining such a community over time.

Sounds to me that Mr. Avi-Yonah is talking about the founding ideology manifest in our constitution: We the people…
To be continued…

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