>On Thu, 27 Jul 2000, Doug Henwood wrote:
>
>> There's a Luxembourg Income Study working paper - sorry I don't have
>> the ref handy - that argues that countries with progressive tax
>> systems don't have a more egalitarian post-fisc (i.e., post-tax,
>> post-transfer) distribution of income. What matters for income
>> distribution is spending much more than taxation.
>
>Doug, this last statement is ridiculous. If all or most taxes come from
>the poor and working class, there can be no net redistribution between
>rich and poor. Because of the particular political constraints in each of
>the countries in the Luxembourg Survey, the trend you mention may exist,
>but that says little about the issue at hand, whether taxing the rich in
>the US is possible.
It's not ridiculous, and the trend does exist. It's as if there are only two sets of people in your universe - the top 1% and "the poor," which for argument's sake let's set equal to the bottom quintile. But 79% of the population falls outside these two groups. You can tax people above the median and transfer the proceeds to people below the median and thereby compress the income distribution. Which is what happens in the social democracies, or what's left of them. And it's largely popular, because people come to like free tuition, free healthcare, free childcare, etc.
The LIS website is down, as it's been for several days, otherwise I'd provide a ref. Just re-read my own precis of the study, and it said that the U.S. has one of the most progressive tax systems in the LIS universe, and we also have the lowest level of redistribution.
>
>But you get to the key point next:
>
>> The post-federal tax (including *all* federal taxes, not only the
>> income taxes that Nathan wants to focus on) distribution of income
>> has gotten more unequal during the Clinton years.
>
>This is because, as I have acknowledged repeatedly, because the pre-tax
>income inequality has grow. But unless you want to argue that federal
>taxes increased the pre-tax inequality, it is irrelevant to whether the
>1993 tax bill led to more taxes by the wealthy being paid.
>
>As I noted in my last post to Max, fighting pre-tax inequality is as
>important as restributing through tax policy, although as I also noted, I
>am unimpressed by the "equality" of European social democracy given the
>global inequality it is based upon.
Your friends in the AFL-CIO might be distressed to hear this. Since you concluded from Max's skepticism about the effects of the top bracket rate boost that he thought taxing the rich was pointless, should I conclude that you think that we should just give up on domestic redistribution and join the Colombian revolutionaries?
> But however fixated you may be on
>Clinton as the source of all that is bad in macroeconomic conditions
>(while mysteriously denying him any agency in the results that are good),
Fucking hell, I said the rate boost was a good thing, didn't I? And I never said that he's the source of all that's bad in macroeconomic conditions. These forced binaries of yours are weapans of the propagandist's art.
>I tend to see the rising inequality as a more structural problem of global
>corporations disempowering both state actors and working class unions.
Well, duh. Jesus. Clinton works for those corporations, by the way.
>Which is one reason I spend my days on labor work building up the power of
>workers to fight expropriation by multinationals at the means of
>production. Ultimately, fighting at the point before the powerful
>appropriate their unequal earnings in the first place is more important
>than the post-fisc battle.
Who said otherwise?
>But throwing all that in just seems at times in the discussion of the 1993
>tax bill as a way to avoid the basic issues of tax policy, whether taxing
>the rich can usefully add to the receipts of government. I know you were
>once a fan of Jerry Brown's flat tax proposal (although I thought you had
>repudiated that enthusiasm)
I was never a fan of JB's flat tax proposal. For about 3 weeks in '92 I was a Jerry Brown fan, but I got over it pretty quickly.
> but I do find it disturbing that you and Max
>seem to be rushing to give ideological comfort to the conservatives who
>deny that taxing the rich will generate any serious revenue.
Let me try this once more, since you seem to be unable to get what Max, the CBO, or I am saying: the rate hike was one part of the increase in federal revenues, but a much smaller part than the increase in incomes and the above-trend (and above-projection) rate of GDP growth.
>the richest 1% of taxpayers right now, with all the loopholes available,
>pay $300 billion per year in income taxes. If their tax burden was
>doubled, that would generate another $300 billion per year.
>
>Why should we even think about taxing working class folks when there is
>that much potential revenue from those riding high on the economy?
There's about 30% of the population between the top 1% and "working class folks." Don't forget about them.
Doug