When Tax Cuts Increased Revenue

History of top marginal income tax rates in the United States (Photo credit: Wikipedia) One of more popular / infamous posts here on Almost Classical is "The 90% Tax Rate Myth." It explores the differences between marginal and effective rates and explains that when the marginal rate was 90% or higher, the effective rate remained relatively consistent, between 40 and 50% throughout the twentieth century. Even in most of Europe, effective rates stay close to that same range, indicating something of a natural ceiling for effective tax rates.

No serious economist would propose a tax rate of five or ten percent for the highest income earners. The actual debate among economists is where tax rates produce the greatest revenues with the least detriment to risk taking and entrepreneurship. In current academic papers, the debate on the highest marginal individual tax rate ranges from 35% to 60%, with most studies finding 45% works well as an effective tax rate on the top ten percent…

Reading for Sanity: Naked Economics

Economists agree on more than they disagree. This might seem like an exaggeration, since the debates on policy are so heated. But policy debates are not about the resolved math or well-established theories within economics. Instead, policy debates are driven by value judgments. What economists and their colleagues in behavioral science, data science, psychology, linguistics, rhetoric (my little niche) and elsewhere can agree on are some rather basic tested notions. What we disagree on is what makes for a "good and righteous" society — and even if we want a values-based government at all.

Charles Wheelan's Naked Economics: Undressing the Dismal Science is 15 years old. Yet, the book reminds me that until recently there was generally more agreement than disagreement within the field of economics and its associated disciplines.

I'm rereading Naked Economics because the hyperbolic rhetoric from the left and right, which are not even that extreme in the United States, h…

The Price of Progressive Policies - Technocracy

Frederick Winslow Taylor (Photo credit: Wikipedia) During the Progressive Era from the 1865-1935, the "progressive movement" supported eugenics and other "scientific" methods for improving the societies of humans. The rush to embrace the new and improved — the future — blinded many progressive thinkers from the risks of their ideology. They foresaw a technocratic class in charge of government, rule of the educated class. Like today, they wanted to ban unhealthy activities (Prohibition) and demand people accept the regulatory power of experts.

The caricature of the right, that it wished to go backwards, was and is generally inaccurate. Instead, most conservatives simply wanted to move ahead cautiously and with a conservative skepticism of the experts. Looking back now, the conservatives were right about more than a few things the Progressives promoted.

We should realize from experience that there is no one, universal, predictable path forward for any community.…

Your Meme Won't Change Me (or anyone else)

Facebook "memes" are among the least and most effective rhetorical devices in use. They are ineffective at changing ideas or winning arguments. They are extremely effective at ensuring your community perceives you as a loyal member, and they reinforce the dominant values and positions in the community.

The memes get more and more extreme as people seek to prove just how much they hate the opposing camp. The claims about the values and authenticity of the opposition also trend towards absolute dismissal and discounting of any genuine differences.

Republicans become thugs and fascists. Democrats become communists. Both sides argue the other represents "real" fascist and authoritarianism. The reality is, there aren't many radicals in the United States. Most voters are centrists.

Social media posts from left and right are demonstrating absolutist stupidity in many of these threads. Conservatives and libertarians are neither extreme anarchists nor fascists. (A…

Exhausted by the Panic

By the end of 2017, I'll care much less about all things political. I'm already finding the constant calls to "do something" exhausting. Sorry, but no... I'm not going to "do" anything anymore.

I wrote... and wrote. I made art, including a satirical campaign film.

Like many, I voted. I didn't get my way.

Listening to Ohio and WV radio stations, I realize that the planned protests actually deepen the support some have for the winner. It makes them all the more committed to resisting "left-coast" radicals and the "elites" they already distrust and dislike.

My job is to take care of our kiddos and take care of myself. That's about all I can manage, right now.

And I'm pretty convinced that little will change (not nearly as much as some fear/believe) in a year or four years.

Activism can wait until I'm up to it. Right now, the panic seems a bit much. Maybe it isn't, but it seems over the top to me.

No, the new presiden…

Time for Supporters of Trump and Clinton to Face Reality

Supporters of Donald Trump and Hillary Clinton seem to be stuck in reality distortion bubbles. This is slightly more pronounced on the Trump side, where outright misinformation is believed. But the Clinton supporters are quick to selectively cite misleading information. Misleading data are only slightly better (and sometimes worse) than wrong information when trying to understand and correct problems.

Trump supporters:

He lost the popular vote. There was no widespread fraud, no mobs of illegal immigrants storming the ballot boxes. He lost, and lost significantly on the raw national popular vote total. (But it is complicated. See notes to Clinton supporters.)He is the least popular president-elect in the history of polling data. There is no mandate.He plans to nominate a cabinet that troubles many traditional conservatives, libertarians, and progressives. That's not a way to build bridges when you lack a mandate.He has a serious problem with facts. You know, that "truthiness&…

Polls Were NOT "Wrong"

Stop blaming polls or calling them "wrong" because only the Huffington Post polling was seriously flawed. Every other model actually offered accurate *ranges* of potential outcomes.
The polls were not wrong. Polls give probability not certainty. They were accurate. If I tell you Hillary Clinton has an 85% chance of winning... hello? She still has a 15% chance of losing. People didn't want to accept that. They assumed 85% = she can't lose. Sean Trende has attempted to explain this with the example of Pennsylvania. The commonwealth was a close election: so close that one percent in both directions did change the winner, but that does not make the polls incorrect. It wasn't the polls: It was the pundits
What occurred wasn’t a failure of the polls. As with Brexit, it was a failure of punditry. Pundits saw Clinton with a 1.9 percent lead in Pennsylvania and assumed she would win. [Note: Margin of error was 3% in most polling!] The correct interpretation was that, if …