So the Brookings Institution has a large report detailing how the Romney tax plan would shower riches on the already rich and screw the poor and middle class. How do right-wingers react? In two ways. First, they simply ignore it:
I have a Firefox add-on that, when you visit memeorandum, labels left leaning sites as blue and right-leaning sites as red. As you can see, every right-winger has basically ignored the story.
The second approach is to smear the study:
The Romney campaign is pushing back against a new study from researchers at the nonpartisan Tax Policy Center suggesting Mitt Romney’s tax proposals would actually increase taxes for a whopping a 95% of Americans, denouncing the Tax Policy Center, a joint project of the Urban Institute and Brookings Institution, as a “liberal” group. While the Romney campaign hasn’t rebutted the substance of the study, they claim the Tax Policy Center should be dismissed entirely as a biased source.
As we all know, facts have a liberal bias.
jl
But the study ignored the coming Romney tax cut boom.
Romney’s campaign said so. Good enough for me.
Maude
La la la, I can’t hear you.
dmsilev
You forgot the third approach, to claim that tax cuts inevitably bring us to the promised land where all will prosper:
Neither Tinkerbelle nor Puck were available for comment.
Villago Delenda Est
Well, the Tax Policy Center fails to take into account the “Romney Boom” that will materialize out of thin air just past noon, EST, on 20 January 2013. This boom, which will be heralded by Sir Mittens riding into DC on the back of a white horse (with one horn) will make all other economic expansions look like the Great Depression, with ponies and tons of money for everyone who has been preapproved by a council on Kolob for proper behavior in the past.
So, clearly, the Tax Policy Center’s projections are just total malarkey.
smintheus
The Brookings report falls all over itself postulating scenarios that are as favorable as possible…or as least unfavorable as they can imagine…to Romney’s plan. Even by the most generous interpretations and in the most favorable parameters, his plan gives all kinds of goodies to the top 1% (mainly to the top one-tenth of one percent) and raises the taxes on the bottom 95%. It’s the way Romney’s plan is supposed to work.
handy
This has pretty much been SOP for the GOP since I can remember. You see it on blogs and forums too. Funny that, because occasionally some wingnut will bust the usual NEW STUDY SAYS GLOBAL WARMING IS A FRAUD AL GORE IS FAT ALSO TOO and it’s a direct link to WND or Newsbusters. Anyone who then criticizes the source is accused of not having an “open mind.” Neat trick.
Mike in NC
You people have been told all you need to know about the Rmoney Boom…
dmsilev
I found some footage of Mittens interacting with normal people. It didn’t go well.
burnspbesq
@dmsilev:
A rate which no corporation actually pays. Statutory rates are irrelevant to this conversation. Effective rates are what matter.
dmsilev
@burnspbesq: Hush, you. Bringing facts to this discussion is strictly prohibited.
gene108
In right-wing circles the Brookings Institute is a flaming-left-wing-drag-queen-gay-Marxist-socialist front group for the New World Order, Agenda 21, the North American Union and Trilateral Commission.
Anything coming from the Brookings Institute is therefore never credible, thus nothing to see here about Romney’s tax plan.
cathyx
But we’re 99%. So the extra 4% of us poor people will get a tax break. See? It’s fair.
burnspbesq
@dmsilev:
Mea maxima culpa.
Belafon (formerly anonevent)
I read somewhere that one of the authors was a Bush economic advisor.
dmsilev
@Villago Delenda Est: You’ve overlooked the possibility that Mitt Romney is Green Lantern and will simply Will an economic boom into existence.
El Cid
OMG LEAVE ANN ROMNEY’S HORSE ALONE CLASS WARFARE CLASS WARFARE ANIMALS WANT TO TAKE MY MONEY
gene108
@Belafon (formerly anonevent):
Bush, Jr. was a liberal plant meant to discredit true movement conservatism. Anyone associated with Bush & Co. cannot be trusted to evaluate true conservatism, because they failed the conservative movement so badly.
some guy
but in the primaries Team Mittens said these folks conducted “Objective third-party analysis” so I don’t understand how thye so suddenly became liberals?
Villago Delenda Est
@some guy:
That was then, this is now.
Jeeze, these things have to be explained to you lieberals every time.
Also, too, SHUT UP THAT’S WHY!
handy
@El Cid:
Dressage Horses are people, my friend!
burnspbesq
@gene108:
Also too, I have here in my hand irrefutable empirical evidence that the inflection point of the Laffer Curve is at a rate higher than what you pay and lower than what I pay. So reducing my taxes and increasing yours is economically efficient.
dmsilev
@some guy: That assessment is retroactively inaccurate.
dmsilev
@handy:
Not only that, but last night Steven Colbert pointed out certain indications that Romney was considering picking Rafalca as his running mate. He also noted that Rafalca’s qualifications, including total number of completed terms as Governor, were on a par with Palin’s.
Brian R.
To riff on John Rogers’ classic post “I Miss Republicans,” I just can’t believe how far off the rails conservatives have gone.
They used to be the elderly Jeffrey Lebowski, cold-eyed and cold-hearted, but realists to the core.
Over the last decade, they’ve become the hippie Jeff Lebowski, stoned out of their mind on an oxycontin high to the point that they believe in all kinds of laughable shit like supply-side economics and Iraqis greeting us as liberators. And anything that they don’t want to believe in — from evolution to climate change to basic economic data — their reply is just “well, that’s like, uh, your opinion, maaaan.”
El Cid
PLEASE GIVE ME ONE OF THOSE ROUND CHOCOLATE UH PASTRY THINGS WITH THE HOLE IN IT WHICH YOU PEOPLE EAT HERE IN YOUR HOVELS.
I AM NOT SURE ABOUT THOSE COOKIES. THEY DON’T LOOK LIKE YOU MADE THEM. YOUR OFFERING OFFENDS ME. TAKE IT AWAY.
ALL THESE WORLDS ARE YOURS EXCEPT ALL OF THEM. ATTEMPT NO INCOMES HERE. IT IS ALL MINE. AND SOME OF MY FRIENDS. YOU KNOW WHO YOU ARE.
Brian R.
@Belafon (formerly anonevent):
Yes, but for GHW Bush, not Dubya.
the Conster
With every day, the FAIL that Mitt’s Republican primary opponents were becomes clearer and clearer. It’s amazing how unprepared and out of a clue Team Mitt is, to not have a better answer than it’s all a liberal plot. He really thinks that you can just bury everything under a pile of money and not have to explain anything, because he doesn’t believe anything. He can’t sell a motherfucking thing. No wonder he had to destroy things to make money – he’s devoid of any creative energy or imagination. What a terrible candidate, thank the FSM.
MikeBoyScout
Brookings uses that well known black magic art of MATH!
When Rmoney mounts his flying dinosaur the economy will be deluged with trickle down riches. Ronald Magnus proved it!
Also too, Palin called Cheney a dick.
SatanicPanic
America needs a CEO as a president. Preferably the kind that ignores good advice.
Brian R.
@SatanicPanic:
I bet Carly Fiorina is available.
SFAW
@burnspbesq:
Ten Ave marias and ten Paternosters for you, bub.
SFAW
@dmsilev:
What, did Rafalca quit halfway through the Dressage event?
Or did people assume that its offspring would also be an Olympic-caliber dancer? (DWTS = Dressage with the Stars?)
ChrisNYC
It’s the most bizarre Red State-y response. DUMBOCRAT BIAS! I half expect them to start calling the President Obummer. Which would be too too delicious.
shortstop
@dmsilev: Of course, plentiful use of convenient loopholes, credits, deductions, etc. keeps our actual corporate tax rate far lower than the official one. In fact, last year, corporate taxes paid fell to a 40-year low. Fortunately, that’s tied closely to falling profits so…oh, wait.
@El Cid: That made me giggle immoderately.
shortstop
@Brian R.: Talk no more smack about Jeff Lebowski! Three White Russians as penance!
Jeffro
@shortstop: Immoderately? I just fell out of my chair and by the look on her face my dog is concerned for my sanity.
OMG I need a tissue, I’m crying here…
geg6
@Brian R.:
The last decade? Seriously? This shit has been going on for thirty years, ever since St. Ronaldus Magnus first trotted out David Stockman to extoll the virtues of the Laffer curve and supply side awesomeness. Trickle down has meant the 1% pissing down the ladder on the rest of us 99% since at least 1980.
shortstop
@Jeffro: El Cid got the gift, man.
burnspbesq
@SFAW:
In nomine patris, et filii, et spiritu sanctus, amen.
Another Halocene Human
LOL @ CNN pretty in pink.
They earned it. Boy howdy did they earn it.
Another Halocene Human
@Villago Delenda Est: The Romney presidency:
Day one, open the Keystone Pipeline (which is Canadian, not Pennsylvanian, despite the name, but–move along!).
Day two, ????.
Day three, no more than 6% employment–profit!
Another Halocene Human
@El Cid: YOUR OFFERING OFFENDS ME. TAKE IT AWAY.
rolling on the FLOOR here…
Another Halocene Human
@Brian R.: Don’t forget pretending to love Jews/follow the Hebrew Bible like Jesus/that they really “get” Jewish culture:
“I’m shomer shabbas!”
shortstop
@Another Halocene Human: That wasn’t even the funniest part. I’m still cryin’ at ATTEMPT NO INCOMES HERE.
Another Halocene Human
@burnspbesq: Isn’t the Laffer curve ultimately theoretical because nobody can point to an example disconfirming a relationship between taxation and GDP where GDP remains constant or increases as opposed to Laffer’s notion that it will plummet at a MAX-x^3 rate that does not occur in a context of massive political and social repression?
No one disputes the left side of the curve (well, the shape of it, maybe, but not the “increase taxes, increase revenues” notion) and only morons pretend we’re not on it. But the right side of the curve is, well, rank speculation that frankly flies in the face of any data I’m aware of, unless we pretend that freedom is the same as tyranny, from a macroeconomic standpoint. Perhaps Friedman’s boys think so, but they always had trouble with any higher math more complicated than “one apple for you, three apples for me.”
danielx
@Villago Delenda Est:
That would be the correct explanation. Facts are stupid things, as St. Ronnie pointed out.
Jeezus, you’d think with the money Romney has he’d be able to hire a competent staff. Not just one that would prevent him from stepping in shit with every third stride, but able to come up with something better than “liberal bias” when caught spouting obvious horseshit. Even “that statement is inpoerative” would be better; “liberal bias” has been done to death. It’s so 2002, you know?
Dude, you’re running for the Presidency, not as candidate for the House seat for the 7th District of East Bumfuck. Karl Rove has got to be grinding his molars down to the gum line: “If I was running this campaign Obama would already be indicted!”
NonyNony
@danielx:
He’d have to be hiring for competency. So far it seems to me like his staff was picked based on how much they stroked his ego and how fast they say “YES!” when Romney asks them if they like his ideas.
Naw – Rove is laughing his ass off at this stuff. He’s just thankful he gets to avoid the failparade this year entirely.
mclaren
As an infantile cowardly nation of self-deluded bullies, Americans have always ignored reality and blithely gone their way with total disregard for facts and logic.
If you don’t believe that, just read an American history textbook. Where do you hear about the holocaust of native American indians, larger than the Nazi slaughter of the Jews? Nowhere.
In American history textbooks, you’ll hear glowing tales about how rugged individualist Americans carved a great nation out of a wilderness — not how Americans stole tens of millions of acres of land from native American indians they raped, slaughtered, and tortured.
burnspbesq
@Another Halocene Human:
If you believe in the diminishing marginal utility of income, then the Laffer curve is logically inevitable. There will be some tax rate at which what’s left after paying taxes on the last dollar of income just ain’t worth as much as some other thing you can do with the time it takes to earn that last dollar of income. Otherwise known as the “fuck it, I’m going sailing” rate of income tax.
That said, we’ve had income tax rates well up into the 90s without seeing great masses of people who pay the top marginal rate going Galt. Piketty and Saez have done some fairly convincing work that suggests that the revenue-optimizing top marginal rate is somewhere in the 70s (If you search Krugman’s archives you’ll find a link).
My personal belief, based on nothing more than intuition, is that the inflection point (the point where the slope changes from positive to negative) is at a rate that is so close to 100 percent as to be irrelevant.
YMMV.
NonyNony
@burnspbesq:
But doesn’t that mistake my personal marginal utility of income with the overall marginal utility of that dollar to the whole pool of possible people who could get that dollar?
Meaning – suppose I’m Ronald Reagan. And I’ve just made my 4th movie of the year and have hit the point where I say “fuck it, I’m going sailing” because for every dollar I make on my 5th movie I’m only going to earn, say, 30 cents (assume a 70% marginal rate). So I refuse to do the movie.
But I’m not the only fucking actor in Hollywood. So instead some other guy gets offered the part – say Charlton Heston. And, since he’s only done 2 movies that year and is going to get, say, 55 cents for every dollar in his contract, he takes it. The government makes less revenue than if I had taken the contract at my high rate, but they make more than the assumptions of the Laffer curve would have us believe because they’re getting money from Charlton.
AND – we receive a second benefit because now there are more folks working instead of one person taking more work that he doesn’t really need (who the hell needed to see Ronald Reagan do 5 movies a year? Nobody.).
So basically – any attempt I’ve made to understand the logic of the Laffer curve seems to run into a barrier that unless you have full employment, you’re never going to run into the problem that government revenues are going to decrease significantly because of a higher marginal rate. And if the “sitting out on extra money” phenomenon truly happened, then it would be a net benefit to society UNTIL we reached a point where everyone who could possibly do the job that you were sitting out on were also too rich to take the job.
“Full Employment” is never an assumption I’ve seen with any talk about the Laffer Curve. And yet it seems like the assumptions at the very base of the idea break down if you believe that there is someone who can come in and take the money you’re passing on because you’ve already earned “too much” this year and don’t think it’s worth your time because of your marginal tax rate.
burnspbesq
@NonyNony:
It is, of course, true that every person has a different marginal-utility-of-income curve. If you aggregate all of those individual curves, you get a national curve (don’t ask me what the best way to aggregate those curves is; for this kind of work, two law degrees are not a good substitute for a Ph.D. in econ). And if the work is done right, the national curve incorporates your insight about the effect of full employment.
Another factor that the simple version of the Laffer curve doesn’t take into account is the effect of wealth on marginal utility of income. It seems intuitively obvious tha at the same level of income, a trust baby will go sailing before someone who is living in a one-bedroom walk-up while she pays off her student loans.
This is what happens when you try to base policy decisions on stuff that was sketched out on a napkin.
jefft452
@NonyNony: “suppose I’m Ronald Reagan. And I’ve just made my 4th movie of the year and have hit the point where I say “fuck it, I’m going sailing”…”
I remember St Ronny saying that
But the thing about Reagan is he told lies
A Lot
When Reagan was in Hollywood they had the “Studio System”
He was under contract to a studio. If the contract said 4 movies a year, he made 4 movies
He couldn’t make a 5th because the Studio could and would sue him for every penny he made on the 5th movie. He couldn’t decide to make only 3 movies for ¾ of the pay because he would be in breach of contract, and the studio could, and would, sue him for every penny he made as an actor until he fulfilled the contract
He couldn’t even choose which movies he would be in,
Hell, if the studio wanted to loan him to another studio, he had no right of refusal
burnspbesq
@jefft452:
All of which is true, but very little of which is germane to the point NonyNony was making.
SFAW
@burnspbesq:
Domine, domine, domine, you’re all Catholics now.
(Ten points if you can tell me where that’s from, without using Teh Google or similar.)
Dexter's new approach
No way the laffer decline is close to 100% in the globalized world. But the difference between 35% and 39.4% – pretty much at the flat area of the curve – is minuscule in the big picture. For the family making $400k, after deductions it’s maybe $2K more a year, or much less than they gain from tax from the keeping the Bush tax cuts for their income <$250k
For the real 1%, taxes don't matter, their are wealthy and the current laws favor them in any event. A normal one-day shift in the markets would impact their wealth more than the higher tax in a year. The rich folks that are fighting the higher tax need to believe that all that money goes to lazy blacks and illegal mexicans
burnspbesq
@SFAW:
No points for me.
But for my penance, I will say three Hail Krguthulus:
http://krugman.blogs.nytimes.com/2012/08/01/dooh-nibor/
ETA: The question is inherently unfair. No one can reasonably be expected to remember shit that was only played when everybody in the room was stoned out of their gourd.
jefft452
@burnspbesq: yes, I know
but pointing out that Reagans personal example of why higher taxes cripple productivity is in fact a fairy tale
is something I do at every chance I get
There are people young enough to not remember how Hollywood used to work
And they need to know that St Ronny was full of shit
SFAW
@burnspbesq:
Normally, I’d make youse go to Google, but, because we likes youse:
Firesign Theater, “Temporarily Humboldt County” (Album: “Waiting for the Electrician or Someone Like Him”)
Not everyone’s cup of tea, but I spent many hours, during my de-formative years, listening to them. Un-stoned, I might add.
ETA: Missed your ETA while I was typing the original reply. Sounds to me like you didn’t need Google, after all.
burnspbesq
Here’s a link to Saez’s CV page, which has links to the relevant work on optimal tax rates.
http://elsa.berkeley.edu/~saez/
burnspbesq
Money quote from Krugman:
Gee, Doc, ya think?
burnspbesq
And here’s a link to the TPC study:
http://www.taxpolicycenter.org/publications/url.cfm?ID=1001628
burnspbesq
@SFAW:
I wish. The ETA was A after consulting teh Google.
SFAW
@burnspbesq:
That’s OK. I’ll still respect you in the morning. Or something.
bemused senior
Don’t expect mathematics from the right wing. One of my earliest memories of wingnut decision making was reading an article in the Texas Observer in the 1960s describing a meeting of the Texas Textbook Commission. A member decried the godless communistic algebra books for trying to confuse innocent Texas youth. “See here … on this page it says x=3 and on this page it says x = 25.”
True story, though the quote is a reconstruction.
(RIP my FDR Democrat dad who subscribed to the TO from my childhood to the end of his life and raised a family of liberal dems.)
NonyNony
@jefft452:
Yeah, I know. But it was actually his example of acting contracts that made it obvious to me that his Laffer curve example was nonsensical. Because there is a HUGE POOL of people who want to be actors most of whom are just as talented as Ronald Reagan.
@burnspbesq:
I don’t actually think anyone has ever actually computed a Laffer curve. Computing marginal utility with money is hard first of all (for all of the things you mention above and more – my own PhD gets me familiar with the basics of utility, though I’m not an economist).
Second of all, the upshot of my argument above is that even if you set the marginal tax rate for the highest income bracket to 100%, you would never see aggregate government revenues go to zero. Never. And you would only see the revenues from the individual dollar we’re talking about go to zero IF there was literally nobody left who was willing to do that job for that dollar (meaning nobody willing to train to do it, nobody willing to emigrate into the country to do it, etc.) Even if we’re talking about investors who decide that it isn’t worth their effort to invest in a new company because they already make enough money, somebody else gets the opportunity that they are leaving behind so it only becomes a problem once all investors are sitting at that magic number AND can be assured that they’ll be at that magic number permanently and so no longer need to invest their money anywhere.
So essentially the left-hand side of the curve is obviously and trivially true – a tax rate of 0% leads to government revenues of $0. But the right-hand side of the curve is completely wrong if we’re talking about marginal tax rates on the highest tax bracket – even a 100% tax rate won’t lead to $0 of revenue, it would just move that earned dollar to someone paying a lower marginal rate.
ericblair
@NonyNony:
The assumption behind all this Laffer crap is that the very successful are such exceptional irreplaceable gods of industry that any attempt to replace their labor would be useless. All those second-tier people are demonstrably inferior, you see, and definitely not as qualified (or more qualified) than the Masters of the Universe.
The graveyard is full of irreplaceable men.
burnspbesq
@NonyNony:
Of course. In his rare lucid moments, I think even Laffer would accept that.
To the (very limited) extent that it’s useful for anything, the Laffer Curve is useful for framing the discussion about the revenue-optimizing highest marginal rate. If it has any validity, what the Laffer Curve does is establish the upper bound for the top marginal rate.
As I said above, based on historical evidence, that upper bound seems to be somewhere in the 90s, a level that is irrelevant under current political conditions.
The Piketty-Saez approach has better math to back it up, and makes more intuitive sense to me.
It would be good if we could take the Laffer Curve out behind the barn, put it out of its misery, and give it a quiet, dignified burial.