Righto.
> By your estimate, that means that raising the top rate to
39.6% from 31%
> added only $15-20 billion per year, or roughly 5-7.5%.
Righto.
> So you seem to be making the conservative supply-side
argument that
> raising rates on the wealthy doesn't make any difference.
Here the 1993
Wrongo. The CBO numbers assume no behavioral changes in the face of tax changes. This means no negative effect of a rate increase on the size of the tax base. Of course, a higher rate on the wealthy is that much more fruitful as the wealthy get wealthier, which the bastards tend to do, but you wouldn't attribute that to the rates.
> bill raised the top rate by 30% and you are arguing that
it delivered only
> 5% more revenue per year than if the bill had never been
passed.
Righto.
> I disagree with your numbers (and why I should believe a
GOP-run CBO is
> beyond me), but more fundamentally, I just find it
astounding that you are
> arguing that tax-the-rich politics are so ineffective.
CBO could be criticized for a bunch of things, but not for these projections. In fact, CBO has been under pressure to incorporate supply-side tenets into the estimates (so-called "dynamic revenue estimates"), but so far it has resisted.
> From your arguments, the only significant reason for the
surplus is
> economic growth.
Righto. And foregone spending (oops. 'fiscal responsibility').
> So from your arguments, the basic message seems to be,
forget tax-the-rich
> politics-- go for growth. Now you obviously favor
Keynesian-based demand
> side growth, but you still seem to be making the case that
taxing the rich
> makes little difference compared to such a growth
strategy.
Actually in the article I posted some months ago, now part of the URPE reader, I did argue for discounting tax-the-rich politics, but in favor of big tax/big spending politics. I also provided a bunch of numbers on how little taxing the rich or corporations does for the social-democratic cause.
> I don't know, but it seems like blind animus to the fact
that Clinton
> might get credit is making you twist methodology to argue
for the
> ineffectiveness of raising taxes on the wealthy.
My 'methodology' is pretty innocent. Since I don't think much of the goal of surplus maximization, it is of little political concern to me how these surpluses were achieved. The most important thing is the missed opportunities for spending initiatives and progressive tax cuts that the Clinton fiscal policy leaves us.
> So let me turn it around. If the 1993 bill didn't get the
rich to pay
> more taxes, is there any kind of tax increase legislation
that would?
> -- Nathan Newman
They did pay more. Right now the chief sources of leakage in terms of the rich and their taxes are capital gains preferences, both thru the income tax and the sieve-like Estate and Gift Tax. Another highly regressive biggie is tax-exempt interest. Check the tax expenditure chapter of the Budget books (Analytical Perspectives volume) and you can write your own shopping list.
Problem is, as I tried to show in the URPE piece, there isn't as much there as you think. Under really-existing social-democracy, the little people pay a heap of taxes, and get a heap of social insurance and public services in return. The lone exception is Sweden, which has the best of both worlds.
mbs