Get Lucky; Is The Wall Street Journal's editorial page written by James Bond villains?

The New Republic ^ | December 17, 2002 | Jonathan Chait

[meyer]

Flat tax!! It's the only fair way. And, it is the only way in which the people that are getting a free ride get to see at least part of what it costs. It lessens the liberals' ability to use my tax dollars to buy the votes of deadbeats (but unfortunately, not the votes of the dead).

[Torie]

We should pay more John. :)

[meyer]

Most of the upper income liberals and moderate liberals I know don't think they are overtaxed.

Perhaps it is time to reinstate the "tax me more" campaign.

[ClearCase_guy]

A real flat tax would mean everybody pays the same amount!

I've never heard that voiced before. I disagree. I support a flat, uniform percentage for everyone, with no itemization or deductions.

Your employer must report your income. Your stock broker must report your transactions. Your bank must report your holdings. The government knows what you earn. Then you pay (perhaps) 15% of that to the government. Everyone is treated equally under the law. Anything else is IMO immoral.

[meyer]

Does the chart include social security withholdings?

[section9]

Supply side is actually not the issue here. It's the old ethical debate of Who Pays What to Whom. And all that is is a debate about first principles, not tax rates. The only thing we can do is watch and see how Bush's tax relief package plays out.

However, having not read the WSJ piece, I can only go so far in this debate and do so with any shred of intellectual honesty.

As to Russia, Putin put in the flat tax precisely because there is a culture of tax avoidance, fraud, and scam. If you lived under Communism for seventy years, you'd learn all the tricks, too. The thirteen percent deal is low enough to be fair to the workers, while moderate enough not to hurt the Mercedes Benz people.

Be Seeing You,

Chris

[Torie]

The chart suggest a flat tax applied on every tax, state, local and federal, would be a move towards progressivity, if only we could find a way to levy a sales tax on the amount that is saved rather than spent.

[Torie]

Yes, you are right, but only in part. The thrust of the Chait piece is about errant facts and assumptions, and false empiricism. Thus, I am weighing in here. We need to get the facts right, or more closely right.

[Mr. Mojo]

But then I am fairly liberal on tax policy matters. The richer should pay more.

Then you should be overjoyed with the current "progressive" system. But even if our current system of thievery received a complete and much needed overhaul and a flat tax was implemented, the "richer" would still pay more --- a lot more.

[Torie]

Yes, everything I think. But I am not sure, just quite sure given the numbers. Of course, one could argue that fica taxes are not taxes at all, but that argument frankly lacks much appeal, except amoung some old FDR new deal diehards, and certainly not among the Right.

[Benrand]

The Journal is perhaps most famous for helping to transform supply-side economics from a crank doctrine ridiculed by mainstream economists and rejected by Washington policymakers into a crank doctrine ridiculed by mainstream economists yet embraced by Washington policymakers.

This entire sentence slips and slides. It's wrong.

[meyer]

The chart suggest a flat tax applied on every tax, state, local and federal, would be a move towards progressivity, if only we could find a way to levy a sales tax on the amount that is saved rather than spent.

Progressive is regressive in that it punishes performance and rewards mediocrity and laziness. There is no reason for a progressive tax. It is theft.

[Torie]

It is accurately, except that the "embracing" is only intermittant and rhetorical in the Bush administration. They don't really believe in supply side in the sense that the lower the rates, the higher the revenue over time. More typically, the White House is able to restrain itself, and just talk about economic stimulus in a recession, or near recession.

[groanup]

"That is right, and the assumption is that about half is in practice. It is driven by the elasticity of the cost of capital actually. The higher the elasticity, the more of the corporate tax will be passed on in the form of higher prices pursuant to market mechanisms."

The elasticity of the cost of capital is base on interest rates, the state of the equity markets, a company's credit rating and outlook etc. The cost of capital, like the cost of taxes has nothing to do with what a company is able to charge for its goods and services.

[Paul Atreides]

I think the word you are looking for is "impracticle."

Concerning the progressive income tax that you favor, I am not rich and may never be rich. I would like to be rich. However, just because I am not rich means that I favor a progressive income tax. Here's how I see it:

If I have a job, making $10,000 per year, and there is a flat income tax rate of 20%, I am paying $2,000 in taxes.

If my friend makes $1,000,000 per year, at the 20% rate, he is still paying more than me.

Also, depending on how he is making his money, if he is a business-owner, he is creating jobs for the community. Which is something that I am not doing.

[Benrand]

Sorry, but it is wrong...it isn't a "crank doctrine" and it is embraced by mainstream economists...in otherwords, he is lying to bolster his argument.

[groanup]

"It is accurately, except that the "embracing" is only intermittant and rhetorical in the Bush administration. They don't really believe in supply side in the sense that the lower the rates, the higher the revenue over time. More typically, the White House is able to restrain itself, and just talk about economic stimulus in a recession, or near recession."

I think I'm outta this one. Have another drink. See ya.

[Torie]

It actually does. If the cost of capital does not go up as corporate taxes go up (and remember this is a worldwide market), then competitive pressures will cause no increase in prices, and the after tax return on capital will be reduced. If it does shoot up, then that increase will be passed on in the form of higher prices. I think I have that right.

[Torie]

Well if you consider Paul Craig Roberts and Arthur Laffer as mainstream, I guess you have a point.

[meyer]

Yes, everything I think. But I am not sure, just quite sure given the numbers. Of course, one could argue that fica taxes are not taxes at all, but that argument frankly lacks much appeal, except amoung some old FDR new deal diehards, and certainly not among the Right.

Withholding taxes should be described in terms of present value of payment minus future returns (which unfortunately have to be estimated and possibly won't be there). In that respect, they aren't really a tax in the same sense as government operating revenue is. You should note that those paying SS taxes at the lower end of the scale tend to over-collect and those at the top of the scale tend to under-collect. This is made moreso when you consider that some SS recipients (those that took care to set themselves up for retirement) have to pay taxes on part of their SS money.