Too Much Faith, Not Too Little

I have long believed that the problem market economies have with statists is misunderstood.

Pro-market folks tend to think that statists just don't understand markets.  And to some extent that's true.  But the real problem is that statists have too much faith in markets.

Wait...too MUCH?  How can that be? (More after the jump...)

Poor Little Rich Kids

Is Growing Up Affluent Risky for Adolescents or Is the Problem Growing Up inan Affluent Neighborhood?

Terese Lund & Eric Dearing, Journal of Research on Adolescence, forthcoming

Abstract:  Community studies indicating that affluence has social-emotional consequences for youth have conflated family and neighborhood wealth. We examined adolescent boys' delinquency and adolescent girls' anxiety-depression as a function of family, neighborhood, and cumulative affluence in a sample that is primarily of European–American descent, but geographically and economically diverse (N = 1,364). Boys in affluent neighborhoods reported higher levels of delinquency and girls in affluent neighborhoods reported higher levels of anxiety-depression compared with youth in middle-class neighborhoods. Neither family affluence nor cumulative affluence, however, placed boys or girls at risk in these domains. Indeed, boys' delinquency and girls' anxiety-depression levels were lowest for those in affluent families living in middle-class neighborhoods.

After the Zombie Apocalypse: Estate Tax Implications

While members of our do-nothing Congress bicker, we are faced with a real problem:  What are the estate tax implications of the zombie apocalypse?

I mean, are they dead, or undead?  Do lost body parts count as "partially included assets," or something else?  And how do you figure the unified credit if I blow up my zombie uncle's head, and then get the gold teeth?  Are those heritable, or are they gifts?  The IRS has no answers.  And you can't very well ask your accountant, if he looks like this:

But Professor Chodorow has answers.

With thanks to the LMM, who doens't really like zombies very much.

Robert knows best

Robert Frank's latest NY Times piece is amazing in its incredibly low ratio of facts to opinion.

When do low tax rates hurt the rich? When Bob Frank says so, buddy.

Let's break down some of the questionable and unsubstantiated claims.

First is the axiom that money buys national political outcomes. That rich donors have bought low tax rates and deregulation. Frank cannot conceive of the idea that low tax rates and deregulation might actually be popular policies with a wide swath of the population! Nor does he present any evidence that money buys outcomes. Perhaps that's because there is little to no evidence that it does.

Next is the bizarre idea that budget deficits reduce the "quantity and quality of public services". Actually, given a level of revenue, budget deficits INCREASE the quantity of public services above what could be purchased without the deficit.  Budget deficits are the buffer that keep government purchases from falling one to one with declines in revenue.

Now consider Frank's notion that taxes on the wealthy are currently so low that we cannot have paved roads and safe bridges. In FY 2012, we spent $287 billion on transportation (Federal State and Local combined). Total government spending is running over $5.6 trillion dollars in 2012.  There is plenty of money for basic public services and infrastructure. At current tax levels, the rich can have their Bentleys and paved roads to drive them on. It's hard to believe that the rich are both so powerful they can dictate their tax rates but so un-powerful that they can't influence where the money is spent.

There's much more, but I'll leave that for you people.

California was a friend of mine. Maryland, you are no California.

 California may be able to get away with constantly increasing taxes, because it's beautiful.  Or would be, except for the fact that it's full of Californians.  

 But Maryland?  The urban parts are a dungheap.  Now wonder people are baling out.  Maryland apparently wants to be the new Michigan.

Perfect

Sometimes you come across a post that is so perfect, in every way, that there is nothing more to say. This post is like that.

Missing the point

The sometimes reasonable Matt Yglesias tweets that "we can incentivize savings without huge giveaways to rich people". Over at Slate, the rarely reliable Dan Gross opines that people making over $250K can afford a tax hike. Over at Econospeak the title is "Tax increases on the rich will not greatly reduce aggregate demand".

All of this is so strange. How is not raising someone's taxes a "huge giveaway"? Who is "we" exactly? Since when is whether someone can afford it the rule for choosing how much to tax (well, I'm given to believe that's how taxes were collected back in the middle ages)? How is the fact that a person may not do exactly what 1960s Keynesian economics wants them to do with their money grounds for taking their money?

Look, I am not disputing that they can "afford" to pay the tax or that those stingy bastards probably will just save the money if "we" let them keep it.

But I am pretty sure that the top 1% of earners are already paying over 40% of the total Federal income taxes, even at the "giveaway" Bush rates. Over 40% of households pay no Federal income taxes at all. "We" are also popping the rich in other areas of taxation besides their top income tax brackets.

On top of all this, the fact remains that taxing "the rich" will not come close to balancing the Federal budget.

On this issue, the progressive blogosphere seems more like a herd of villagers with pitchforks and torches than a group of sophisticated intellectuals.