Almost Classical

This campaign season in the United States is already producing some meme myths on social media. One I keep seeing is the "90% tax rate" myth. Often, the responses prove people don't understand the marginal rate system of the U.S. income tax. Another meme that does reflect marginal rates claims there was a 70 percent effective tax rate. That's not quite reality, either, though. (It is, and it isn't, as I'll try to explain.) The most popular blog posts on Almost Classical remains The 90% Tax Rate Myth , in which I explain effective rates vs. top marginal rates and the relative stability of top rates excluding outliers of less than 10 tax filers. That’s necessary because some of the “top tax rates” would have applied to… ONE PERSON . As I wrote in that old post: As a result of deductions and exclusions, even the theoretical maximum Real Rate of taxation at 60% in 1944 overstates taxation dramatically. The reality? On earned income, the richest U.S. taxpayer...

Eligible citizens in the United States don't vote. A majority of 18 to 25-year-old voters have little faith in government and no desire to serve in public office. Personally, I don't blame them. I was engaged until about 2006. My disengagement is as much a statement as my direct participation was. Too often, though, partisans can't understand that not being engaged is a rhetorical choice. What if a person truly believes that both major parties are horrible for the United States and the world? The notion of voting for the "lesser of two evils" still requires voting for evil. A pacifist I know explained it this way: She cannot, for any reason, vote for any president or party that is likely to take any military action. This is a deep religious conviction. How would she express this conviction? Voting for a minor party doesn't change the outcome, and no major media outlets cover those candidates. I deeply object to policies of the two major parties. I ...

The Inaugural Address reveals a lot about Pres. Obama. President Obama’s Second Inaugural Address - Washington Wire - WSJ :  Through it all, we have never relinquished our skepticism of central authority, nor have we succumbed to the fiction that all society’s ills can be cured through government alone. Our celebration of initiative and enterprise; our insistence on hard work and personal responsibility, are constants in our character. I wish I could believe he meant those words, but too often it seems Pres. Obama has faith in central planning, that bureaucrats do know best what is "right" for the rest of us. He is insufficiently skeptical of government, its expertise, and its power. The next section is more along the lines of "You didn't build that…" (a statement I and many others have explored in context of his full campaign speech). The president reminds us that "collectively" we stand. A false argument, since nobody is arguing against all gov...

Following my last post, a friend asked if I was "coming out" as a Republican. No. That's not going to happen, since I am deeply offended by the influence of the religious conservatives within the GOP. I have no interest in supporting candidates or a party that isn't willing to "live and let live" on most social issues. But, I'm also not going to embrace a party that wants to regulate an even broader range of behaviors I consider to be personal choices. If I want a greasy burger or a buttery croissant, leave me alone. "Sin tax" is one of the more idiotic phrases in government revenue collection. Given a choice, I am more likely to support and even work for "conservative" Democrats, but I'd also consider a "liberal" Republican. However, I tend to focus on issues as a scholar and adviser rather than individuals. I don't like or trust politicians, but I can support a cause. If you want me to collect data and report o...

[NOTE Augusut 8, 2017:  The marginal and effective U.S. Tax rates mentioned in this 2011 post have been supported by research conducted by Thomas Piketty (Paris School of Economics), Emmanuel Saez (UC Berkeley and NBER), and Gabriel Zucman (UC Berkeley and NBER). These economic researchers are well-respected by progressives. Data are data, though we differ on interpretations. "Income" vs. "Wealth" presents much of the challenge, as wealth accumulates but is not taxed in the United States. Distributional National Accounts:  Methods and Estimates for the United States published July 6, 2017, includes the following table: As the table shows, the effective tax rate for the top 1 percent peaked at 45 percent of income in 1944-45. Unfortunately, the overall revenue intake of the United States kept growing and the burden has been falling most on the bottom 50 percent. Tax increases on the middle and lower classes reduce potential economic growth since...