Tax Facts

There are a number of myths that I continuously hear repeatedly on the right. One is that federal taxation is exceptionally progressive. I've shown before that it isn't. It's progressive, but mildly so. Here's a chart that contrasts share of income with share of tax burden by income group when you consider all taxes, including state and local. (Italicized portion added per DF's comments below, sorry for my poor writing).


Another claim is that the Bush tax cuts lead to an increase in federal revenue. Here's the data. Bush is the first President since Eisenhower to preside over an administration that actually saw a reduction in revenue. The Bush reduction was even greater than Eisenhower, making Bush the worst performer by this measure.

I've made these points before, but what I want to add here is information about how the tax code has become much less progressive over the last few decades for the highest income groups. Looking at my prior link you can see that tax receipts as a % of GDP are not a lot different over the last few decades. On the order of 17 or 18% of GDP typically. While that has remained fairly constant, what's changed is that the burden of those receipts is falling more and more to the poor.

Most people know that the tax rates for the upper income brackets were enormous. The top marginal rate was something like 91% at one point. But what was the effective rate? Tax havens and shelters play a role. How much of a role? Piketty and Saez have the data in detail here. A chart derived from this data is below:

The Credibility of Evangelical Conferences

I think it's pretty well established that Ergun Caner faked a Muslim background in order to ride fear and bigotry into evangelical stardom by Muslim bashing. He's not the only one. There's a lot of demand for such nonsense in neoconservative circles.

OK, things happen. Scammers sneak through. What can you do? How about not booking a guy like Ergun Caner at Christian conferences as if he's an expert on Islam? But no, at "Veritas Evangelical Seminary" (whatever that is) we have Ergun Caner lecturing on "The Secrets of Islam." I'd think he'd be embarrassed to show his face and even talk about Islam at this point. Not in the evangelical world apparently.

How Does the Free Market Solve This?

I was at the library yesterday to pick up a book on hold (Voices from the Other Side if you're curious) and I scanned movies and saw "Darwin's Nightmare" which I thought looked interesting and informative. It was. Also heart breaking.

Every day 500 tons, sometimes more, of fish is flown out of Tanzania, mostly to Europe. It is extracted from Lake Victoria. What's flown in is armaments sold in places like the Congo or Nigeria. These are coming mostly from European arms dealers. Meanwhile the residents of Tanzania are literally starving. Most children you see don't seem to have any parenting. Fathers are either gone working as fishermen or dead due to AIDS. Widows turn to prostitution. Children find things to smoke or sniff so they can sleep in the streets without feeling anything. If they are sodomized the high prevents pain. Children literally beat each other up fighting for food.

Sometimes the fish load is more than the planes can carry, so the unfrozen remains are available. These are collected by the residents and placed on racks. Covered in flies and maggots, the lucky employed work through them. The rotten fish are boiled. This product is sold to the residents.

The UN comes in and notes that yeah, everyone is starving and they need aid. They complain about the suffering. But they go home and eat their fillets. The question is raised in the movie. The source of the problem is the incoming armaments and outgoing food. To request aid is to treat the symptom. Wouldn't it make more sense for Europe to block the armaments and block the plundering of the lake? But if that was done what would these UN diplomats do with themselves?

The problem in my mind is the institution itself. The arms dealers like the present system. The cargo plane owners like it. The fish preparation factory owners like it. The providers of racks like it. The wealthy few corporations really like what's happening. The many poor suffer.

I have a difficult time understanding free market solutions to this problem. I think I know what liberterians would suggest. I just cannot fathom though why we should expect these solutions to work. What is the free market solution here?

This article from the conservative Hoover Institute says the problem is property rights. Robinson says that Europe had patent law. This allowed persons in Britain to be secure in knowing that they would enjoy the benefits of their inventions. He says Europe cast aside serfdom earlier than Africa. Serfdom is contrary to good property rights (is it?). In parts of Africa today certain chiefs control everything and you need good connections to have hope.

I agree that's a problem, though it doesn't seem to be a problem in Tanzania. The cargo planes are owned by a company and they don't seem to have problems. The fish preparation factories are doing fine. They can pay guards $1/day to watch their plants, though those guards are sometimes murdered. I didn't see big problems for owners, but supposing this is an issue. How do we fix it?

Open up the markets to free trade, says Robinson. I don't understand how that solves anything. The Europeans are having no difficulty shipping in arms and flying out the food. My understanding is that the barriers to trade have been low for 30 years. Next Robinson says economics should play a bigger role in foreign policy. Finally we need to promote more checks and balances in government in Africa.

These later two suggestions seem too vague to be useful. The free trade suggestion seems to me is already being implemented, but it's the one concrete suggestion. So what else?

Here's another approach. Reduce trade barriers, open markets, end the subsidies.

How does this solve the problem? There's plenty of trade. Europeans are good at making weapons. Africans lack technical skills, so they fish. We're all pursuing our comparative advantage. And the children starve. The mothers are driven in to prostitution. $10 for the night. That's their comparative advantage. In my view the free market solution should be expected to lead to status quo.

In my view what would help is independence. Prior to 1980 economic growth in Africa following WWII was pretty good. A shade under 2% growth in GDP. Since then they have been subjected to international trade agreements that prevent them from operating independently. Growth didn't just stop, but declined. Countries that have governments with enough muscle to resist those agreements have done well (China, India). They need independence, not forced free trade and neoliberalism.

One can disagree with my solution, but why think more free trade would help Africa?

Weird Al-Party at the CIA

Funny or disturbing?

Historical Tariff Rates

A screen shot from Ha-Joon Chang's Kicking Away the Ladder.

White Blonde's Aren't Terrorists

What a scoop Bob Dutko had today. It turns out he was interviewing Robert Spencer. Well, Robert Spencer is in the news. The Norwegian.....terrorist...apparently regards Spencer and other right wing Muslim bashing pundits, as intellectual mentors.

So I turn on Dutko and he says "Robert Spencer joins me know." Wow, what great timing. So they start talking about this book that supposedly shows Obama is some sort of Muslim lover, and the interview is going on long enough that I'm wondering if he's replaying an old interview. Nothing about the terrorist incident in Norway.

But finally Spencer raises it. "See they're trying to tie me to this incident, which is about as silly as blaming the Beatles for Charles Manson when he heard instructions to murder in their song "Helter Skelter."

Well at least somebody raised the issue. So Bob finally starts talking about it and of course it's all ridiculous. Further he's not even really sure this is terrorism, because a terrorist is motivated by his ideology. But Spencer corrects Bob. "That's just it. That's what's so insidious about the media spin. He does have an ideology that he shares with me, and so they can paint me as some sort of villain."

Well at least Spencer understands what's happening. Spencer then had to leave, but Bob took calls regarding his belief that 1-in fact this wasn't terrorism and 2-Breivic isn't really a Christian.

Unfortunately I wasn't able to record the audio, but I did call in and speak with Bob about this. I said his double standard is becoming crystal clear. He had said earlier "Let me remind you of these various terrorist incidents" and he listed various things that killed typical a handful of people. One that he described was the Ft. Hood attack. I asked Bob to think about the Ft. Hood attack. This guy attacked members of a military that presently is illegally occupying Muslim lands. Bob had defined terrorism for me in the past. He had said it involves attacks on civilians. So when a non-Muslim attacks civilians that's not terrorism, but when a Muslim attacks military targets that's terrorism?

I was barely able to get that out, or maybe I got it out in a few bits, because Bob was interrupting me immediately to dispute every side claim. "I don't agree that we are occupying Muslim lands." "Ok, our military is present in Muslim lands attacking Muslims." "I don't agree to that. We were invited." "Libya invited us?" "I'm not talking about Libya." "WTF." I'm going from memory here, but it was something like this.

The guy at Ft. Hood said "Allah Akbar". He had an ideology, Bob said. I replied that Robert Spencer knows that Breivic did as well. But Bob says he doesn't agree with Spencer. If the Ft. Hood guy attacked our military IN AFGHANISTAN, then it wouldn't be terrorism, but these military people aren't actively involved in combat. Breivic didn't shout Allah Akbar.

This is just plain convoluted in my mind. What is the criteria for terrorism? "So you have to say Allah Akbar to be a terrorist." No, if a Christian shouted Jesus is Lord he'd be a terrorist. Why would you say that I wouldn't think someone is a terrorist if they shouted Jesus is Lord, Bob asks.

I said I just don't understand what constitutes terrorism so I'm trying to ask the question. They have an ideology, Bob says. 20% of Muslims think the use of terrorism is a legitimate response to Americans. That is a very high percentage, Bob says. Sure, it's not a majority. But that's still a lot of people.

But, I said, you support terrorism. When Israel engages in terrorism by attacking Palestinian civilians you support that. "Now you're changing subjects. You want to call me on Open Line Friday about that we can talk about that, but that's not what this is about."

Anyway, that's sort of my best recollection. Might not be perfect. Not written great. I just wanted to try and capture it for my own benefit. Bob was more irritable than he's ever been with me, constantly interrupting, even pontificating on how I was losing the debate. I think he's just on very shaky ground here and that discomfort made him irritable.

Here's the bottom line. In the real world Bob wants Muslims to be the only terrorists. He wants to allow non-Muslims theoretically, but contrive a definition that generally excludes non-Muslims. It used to be about attacks on civilians. Not any more. That's no longer working. Now it's attacking members of a military that aren't presently engaged in combat, but maybe if they are located in their home country, and you have to sort of shout in a way that informs us that you have some sort of ideology that's motivating this violence. And "ideology" needs to be defined in such as way as to exclude this blonde haired Norwegian. Make sense? It does to Bob Dutko.

Historical Debt Limit Increases

The debt limit has been raised routinely and without controversy often in the past. Below is a chart showing the increases since Carter. Why the sudden controversy now? Data via the LA Times. Click to enlarge.