Equalising incomes lowers total income – Laffer curve confirmed by Krugman

A really interesting point made by James Taranto at the WSJ (it’s the second item down). Paul Krugman has shown some pleasure in the tax increases that came with the New Year fiscal cliff agreement since it has promoted, in Krugman’s view at least, equality of incomes. Of this, James notes that raising taxes does not affect your income, or at least not in the first instance, only how much you keep for yourself.

If you make $2 million and the government taxes it at 50%, your income is the same as if you make $2 million and the government taxes it at 40%. That is to say that higher tax rates do not directly affect income, they only redistribute it.

Some people argue, however, that higher marginal rates indirectly affect income–that the more of each additional dollar of income the government takes, the less incentive a taxpayer has to make the dollar in the first place. Higher marginal tax rates make workers less inclined to work and investors warier about taking risks. Thus if you raise marginal rates at the top, the wealthiest taxpayers will start earning less, reducing income inequality (but also economic growth and government revenue).

These people, they really don’t care that they harm economic prospects in general since it’s envy and personal greed that drive them.

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231 Responses to Equalising incomes lowers total income – Laffer curve confirmed by Krugman

  1. MattR

    These people, they really don’t care that they harm economic prospects in general since it’s envy and personal greed that drive them.

    Exactly, in the US the ‘rich’ pay the vast majority of the tax yet they are now asked to ‘pay their fair share’? How about other pay their fair share? How about the government simply stops spending on worthless welfare?

    The left know nothing about economics, what they DO know is how to obtain power, for themselves. Unfortunately when you have idiots in charge, the nation doesn’t do so well.

  2. You then have a few choices; work harder producing more to make up for what the socialists steal (socialists think non-socialists are obsessed by greed so they think this is a viable option), work less and spend more time on cheap recreation (that’s my option) or migrate to a place with lower taxes.

    The socialists solution to the last two isn’t pretty, murdering 100 million last century.

  3. NoFixedAddress

    Steve,

    The whole ‘taxing the rich’ furphy is to take away the focus on what ‘the gummint’ is wasting the money they extort from people on.

    If we were to have true tax reform, and don’t talk about economies of scale, we would return all taxing powers back to the States and leave the ‘commonwealth’ with excise tax.

    If we were to have true tax reform, screams from the rent seeking accounting profession here, we would eliminate most of tax law.

  4. Crossie

    Krugman and people like him have used the capitalist system to amass large amounts of money and property and now want to pull up the ladder up behind them so that nobody else gets the same opportunity. But they can’t say that so they spout the lofty ideals of equality. See, greed is bad but only after they got theirs.

    What’s even worse is the incitement of low income earners to hate everyone who earns more than they do.

    By pushing equality you end up with everybody working for the government since all private enterprise has taken their ball and gone elsewhere. Even without the oppression that goes with these sort of societies you still get the attitude that prevailed in USSR before the break-up: they can’t pay me as little as I can work.

  5. NoFixedAddress

    @Crossie…

    well said.

    we need to get rid of 90% of all ‘social’ laws.

    The labor (who do they represent?) party are busy attacking abbott, abbott, abbott and i don’t blame them.

    he is labor right.

    when malcolm turnbull can win a poll as the best person to be the leader of the labor party and he appeared at malaney ‘folk’ festival… get fucked

  6. Walter Plinge

    Almost two-thirds of the country’s million-pound earners disappeared from official statistics after the introduction of the 50p top rate of tax, figures have disclosed.

    In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.

    This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.

    The figures have been seized upon by the Conservatives to claim that increasing the highest rate of tax actually led to a loss in revenues for the Government.
    It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.

    http://www.telegraph.co.uk/news/politics/9740253/Two-thirds-of-millionaires-disappeared-from-official-statistics-to-avoid-50p-tax-rate.html

  7. Entropy

    I would think there would be a curve which started off rising representing the increased incentive to earn more as the tax rate increased. The curve would rise to a point after which it would begin to decline, probably steeper than the rise. Might be an honours thesis in it.

  8. William Bragg

    More simplistic right-wing twaddle from Kates. In his universe, any concern for equity and fairness is converted into ‘personal greed and envy’. In fact, many people support redistribution when they themselves would be worse off financially. Like many right-wingers though, Kates uses the envy discourse to attempt to dismiss concerns about equity without having the properly confront them, because he lacks credible arguments to counter equity concerns on their merits. He seems happy to live with whatever distribution the market decides, irrespective of the initial distribution of talents and opportunities that is so influential in the end-distribution of benefits in a so-called free market society. The upshot is that slaves to free market ideology, like Kates, having nothing worthwhile to contribute on discussions about equity.

  9. JC

    Kates uses the envy discourse to attempt to dismiss concerns about equity without having the properly confront them, because he lacks credible arguments to counter equity concerns on their merits.

    Braggs

    What moral responsibility do I have to ensure that your living standard is in the top 5% of the worlds population. This is done by you voting for a group of people that promise to send me to jail if i don’t pay the your big.

    Go!

  10. John Mc

    In fact, many people support redistribution when they themselves would be worse off financially.

    They do it voluntarily as well. Look at Bill Gate’s charities. That’s a completely different thing to saying other people need to pay more. And he’ll probably do something that governments couldn’t do like wipe out malaria.

    Who gives a shit about ‘equity’. I’m better off because Bill Gates is stinking rich. We’d all be much worse off if Bill Gates wasn’t such a successful businessman.

  11. William Bragg

    Your economic ignorance shines through once again, JC.

    Under a simple progessive tax system, the top 5% remain the top 5%. All such a system does is compress relativities.

  12. John Mc

    Under a simple progessive tax system, the top 5% remain the top 5%. All such a system does is compress relativities

    And provides larger disincentives to achieve more, the more successful you are.

  13. wreckage

    Under a simple progessive tax system, the top 5% remain the top 5%. All such a system does is compress relativities.

    Which is, in and of itself, a completely pointless activity, driven by the most basic, and basest, human motivation: envy.

  14. .

    . In his universe, any concern for equity and fairness is converted into ‘personal greed and envy’. In fact, many people support redistribution when they themselves would be worse off financially.

    I am against shallow, callous calls for more ‘equity” as the result would be more people would be worse off.

    Like many right-wingers though, Kates uses the envy discourse to attempt to dismiss concerns about equity without having the properly confront them, because he lacks credible arguments to counter equity concerns on their merits.

    Justify payroll taxes, excise taxes and tariffs, along with parallel importing and high income tax EMTRs for wage earners.

    GO!!!

  15. wreckage

    If compressing relativities does not improve total productivity or welfare, why bother? All it does is satiate the desire to be avenged on those we envy.

  16. Alice

    I agree with William

    What is the matter with the rich if a LONG island estate is not enough. There were still plenty of those in the 1950s when they had much higher rates of tax on the wealthy (and when inequality wasnt so extrem)

    – and get this – no originator of this comment is suggesting perfect communistic equality – I hate the counter arguments where people take the extreme opposite position – so dont even try it!

  17. John Mc

    Hey Bill Bragg, who has done more good in the world, Bill Gates or Mother Theresa?

  18. wreckage

    Equity doesn’t exist, envy does. There is strong evidence that people are driven by envy, and only weak evidence that a focus on equity-of-outcomes actually achieves anything, even internally to its own logic.

  19. wreckage

    Why would I give a damn how big a rich guy’s house is? Where’s the evidence that taxing the hell out of him will benefit me one jot?

    Embrace self-interest as an alternative to envy, people. It’s the first step from a revenge-obsessed anger towards contented enlightenment.

  20. wreckage

    What is the matter with the rich if a LONG island estate is not enough.

    What is the matter with you if you want anything beyond that confiscated?

  21. .

    What is the matter with the rich if a LONG island estate is not enough. There were still plenty of those in the 1950s when they had much higher rates of tax on the wealthy (and when inequality wasnt so extrem)

    You are just making a normative choice to publish people for success. There is no justification to punish them or their descendents, morally or economically.

    They do not make others poor by amassing assets.

    You are not reasoning, but making a plea.

  22. John Mc

    – and get this – no originator of this comment is suggesting perfect communistic equality – I hate the counter arguments where people take the extreme opposite position – so dont even try it!

    Alice, no one here is suggesting completely laissez faire capitalism either. Here’s a suggestion, why don’t we try just a little bit more of free market approach to problem solving for a change, rather than the usual reflex of more regulation and taxes.

  23. .

    I am. Australia had the highest per capita income in the world during the gold standard era and low unemployment.

    Paying more single mother’s pensions, forcing employees to give a proportion of their total remuneration to union fund managers, taxing transactions, regulating fisheries out of existence, building the NBN, taxing the mining industry solely because it is highly productive, are all job and prosperity destroying ventures. The efficiency of a private school far exceeds that of a public school, and the quality of education and discipline is generally higher.

    None of these help the indigent or working poor save for a few mothers who are down on their luck – as opposed to others who see it sadly as a “career”.

  24. William Bragg

    On cue, John Mc confirms that slaves to free market ideology have little worthwhile to contribute to the discussion when he asks, apparently rhetorically, “who gives a shit about equity”. Umm, most of the human race, actually, as plenty of psychological research and experimental economics has shown. Just not Cats, it seems.

    Then wreckage tells us that compressing relativities does no more than “satiate the desire to be avenged on those we envy”. While reducing disparities has an efficiency benefit in that reframing the norms of consumption can alter people’s expectations and thereby make them happier with what they have, the key benefit for many people who find more money in their pockets is simply that they are able to consume more (and/or work less while retaining the same material wellbeing).

    This benefit does not require that the people covet and/or attain the consumption levels of people above the on the scale, and has nothing to do with envy, irrespective of how often and stridently right-wingers might try to derail the debate in this way.

  25. .

    Shut up and show us how excise and payroll taxes, or the job destroying mining tax helps the poor you self aggrandising windbag.

    While reducing disparities has an efficiency benefit in that reframing the norms of consumption can alter people’s expectations and thereby make them happier with what they have

    Gibberish. Also, false. You are not prepared to back THIS up with research because it is demonstrably false.

    This benefit does not require that the people covet and/or attain the consumption levels of people above the on the scale, and has nothing to do with envy,

    A totally unsupported assertion you just made up. You are simply envious. Fact. You are willing to lie and sophisticate spurious reasons to support your envy.

    Happiness studies were seen as a sneaky way of justifying communism by the left, after the humiliation they suffered when the cold war was lost. They failed. Money still made people happy. Immigration flows show that such agenda driven research was rubbish all along. On the other hand we have indicies which ‘tell’ us that palestine is a better place to live than the USA or the COmmonwealth of Australia…whilst the same left wing windbags bleat about the oppression of Palestine from “capitalist” USA supporting Israel diplomatically.

    “Clever Dick” “William Bragg” etc is actually telling us we’d be better off if we we’re poorer but equal. He also has some other bizzare, misanthropic and fascist beliefs such as the Government can mandate what we like.

    What a chucklehead.

  26. John Mc

    “who gives a shit about equity”. Umm, most of the human race, actually, as plenty of psychological research and experimental economics has shown.

    As recent centuries has shown the only equity that matters is equity under law. The more people ‘care’ about your type of ‘equity’ – i.e. envy – the poorer they become. The less they care, assuming equality under law, the more prosperous, happier and enlightened their society becomes. Socialism is a ticket to Shitville.

  27. JC

    What is the matter with the rich if a LONG island estate is not enough. There were still plenty of those in the 1950s when they had much higher rates of tax on the wealthy (and when inequality wasnt so extrem)

    people nned to be aware that the tax system prior to the Reagan reforms was a hodge podge of deductions and tax shelters.

    No one paid the top tax rate.

    This is the fact…

    The US income tax take no matter when rates were astronomical or lower has been around 18%. This hasn’t changed.

  28. Alice

    John MC

    Im glad you are not suggesting laissez faire capitalism and I am not suggesting complete equality communism which means at least its not dead end discussion etc but as i see it there are some pretty big deficit problems in the US and elsewhere as a result of the gfc

    Either

    1. Not enough tax income (and we know piles of untaxed anywhere income is sitting in tax free zones globally)
    2. Too much government spoending (and favours and handouts and tax exemptions to buddies, powerful corporations etc – there are huge big mouths on the teat as well as lots of little ones)
    3. Inequality has gone through the roof.

    Im not sure we havent already been heading down the path you suggest more of (less regulation and lower taxes) and Im not sure going further in that direction is going to make either grassroots members of the republicans or the democrats happy.

    You cant expect narrowing bands of people to support tax evaders and other bludgers and you cant force a majority of people towards penury and starvation in the process (or they will steal rather than die).

    What might make everyone better off is if these puppets for someone who get elected cant ride on money and dontations and handouts and jobs etc into the political role – and then keep milking for money and donations when they are supposed to be making smart decisions in government.

    The US got what it deserved making its government a marketplace already.

    There are boundaries or there whould be between the marketplace and the public good. Governments are or should be part of the latter. The US has crossed the line and blurred the boundary and its a free for all now.

    I dont feel sorry for them (thats the way they chose to go) but they are losing their grip big time and they are not really a great example of a free market now.

  29. .

    As the last ALP primary vote in NSW was well below 30%, I’d say a majority of people don’t give a shit about equity.

    They (and the majority of the working poor) want a system where they can aim high. The economic system we have is however verging towards a stagnant Dirigisme and generational poverty and high taxes on wage earners trying to accumulate capital enforce a quasi caste system.

    Equity! Apparently.

    Only a bloody fool would champion the status quo or current Government if they wanted the working poor to be fairly rewarded for effort.

  30. JC

    our economic ignorance shines through once again, JC.

    You’re projecting you fucking clown. You have absolutely no fucking idea.

    Under a simple progessive tax system, the top 5% remain the top 5%. All such a system does is compress relativities.

    Interesting but it has nothing to do with my comment, you nutball. I have no moral responsibility to maintain your existence. None.

    In fact if I had my way, I wouldn’t even piss on you if you were on fire, Braggs.

  31. .

    1. Not enough tax income (and we know piles of untaxed anywhere income is sitting in tax free zones globally)

    So they’re gunna INVADE OTHER COUNTRIES TO SAVE MONEY?

    2. Too much government spoending (and favours and handouts and tax exemptions to buddies, powerful corporations etc – there are huge big mouths on the teat as well as lots of little ones)

    3. Inequality has gone through the roof.

    Ignoring the irony that you can’t see collecting such “piles of money” would directly result in 2. – the fact that you can’t see how 2. and 3. are related speaks volumes. You are just talking shit as usual, Alice. Someone on the minimum wage in the US faces a high EMTR. A sugar cane producer cops massive subsidies.

    Yet you think free markets, with low or no taxes on low income earners, and having failing business divest or big business actually pay net tax, somehow “decreases equality”.

    Chump.

  32. JC

    I would like to add

    18% of GDP..

  33. Alice

    Dot says

    “You are just making a normative choice to publish people for success. There is no justification to punish them or their descendents, morally or economically.”

    No-one including myself is suggesting punishing the wealthy in the US Dot.

    I am suggesting they pay a larger perventage in their progressive income tax rate (to reduce the unhealthy level of inequality) and that the government look everywhere it can to reduce wasteful spending without putting the boot further into the most needy (unlike what Macklin and thin lipped unsympathetic Gillard in Australia have just done).

  34. JC

    I am suggesting they pay a larger perventage in their progressive income tax rate (to reduce the unhealthy level of inequality)

    Why? What’s the point?

  35. .

    1. Not enough tax income (and we know piles of untaxed anywhere income is sitting in tax free zones globally)

    Hollande thought so about French upper income earners – then they moved to Belgium.

    Should Hollande force Brussells to collect the tax and hand it over to Paris?

    What the fuck happened last time one of the sons of Charlemange decided to trapse through Belgium, you twit?

    How to save the budget. Declare war. Invade. Ignorance is strength.

  36. wreckage

    Then wreckage tells us that compressing relativities does no more than “satiate the desire to be avenged on those we envy”. While reducing disparities has an efficiency benefit in that reframing the norms of consumption can alter people’s expectations and thereby make them happier with what they have, the key benefit for many people who find more money in their pockets is simply that they are able to consume more (and/or work less while retaining the same material wellbeing).

    So are you compressing relativities or increasing the incomes of the working class? One is useless, the other more reliably done by capitalism.

    My point is, and this you’ve conveniently ignored, that less redistributive systems actually generate more wealth for the poor. This violates the moral norms and expectations of the Marxist and post-Marxist, so they start to harp on equity-of-outcome.

    Equity-of-outcome of course demands unequal tax and legal treatment, whereas simple and consistent laws are the mainstay of Libertarianism. Since it’s hard to argue with the moral reasoning of Libertarians – and by the way I’m not one – the argument quickly turns to straw men and slander.

    Of course, the other problem with the redistributive system is its morality; it compromises itself when it abandons equity in favour of profits, which it must do to some extent to raise sufficient revenue and appease the professional and middle classes. This is one explanation for the appalling standards of the ALP. Every member has already internalised the necessity of moral compromise to attain wealth.

    However, the capitalist believes that equal treatment, not equal outcomes, is “right” for the law, and the shortfall should be made up by human action not faceless and compassionless equations, and that such a system maximises benefits for all. Whether the capitalist is right or wrong, he or she is morally consistent.

  37. Tel

    How to save the budget. Declare war. Invade. Ignorance is strength.

    Worked for Dubbya.

  38. Alice

    I understand what you are saying Dot – they did it in California and lot moved out but there is a tipping point and if some require Tax free status to live somewhere then to some extent let their bludging presence burden some other government. They are not awlays the gift they appear if they are going to sit on their money, gamble and not produce more. There are leaks at the top too.

    Slowly slowly Dot. A small rise becomes normalised – then another small rise. Maybe even the fact that it is changed at least the wealthy have to spend on their accountants and lawyers to figure out again how to evade the new rate – plus they pay removalists to get out of town. You totally ignore the creative creation of new markets where the middle class, now doing better and less in debt, can afford to be more entrepreneurial.

    If we can have creative destruction we can have creative production. It doesnt have to rely on the same core of familiars who are sticking their hands out for tax breaks and not paying income tax.

    We still need government infrastructure and services. If you are suggesting complete laissez faire then everyone needs a gun and guess who will have the biggest walls and the biggest guns

    (and havent we been to that miserable place before)?.

  39. John Mc

    As the last ALP primary vote in NSW was well below 30%, I’d say a majority of people don’t give a shit about equity.

    The ALP and the Greens are doing a great job in showing people what ‘equality’ really looks like: a totalitarian nanny-state with the best paid jobs being government bureaucracy. This is a good thing as it helps get rid of the romantic notions that people dream up and politicians try to sell.

    Visiting the family in Penrith over Christmas. If you think that lot wants that particular version of ‘equality’ you’ve got another thing coming. There’s a lot less envy and lot more ‘leave me the fuck alone’ in those communities than many people think.

  40. Tel

    Socialism is a ticket to Shitville.

    I thought we kept North Korea around specifically as a reminder, but maybe we need a “Kim is Sexy” channel on YouTube to reach the younger generation.

  41. .

    Equity is bullshit. What is the “optimal” Gini coefficient, and why is that simply not a subjective, normative judgement?

    We ought to just let the less well off enrich themselves and avoid perverse incentives.

    At present, we fail at both.

  42. John Mc

    not enough tax income (and we know piles of untaxed anywhere income is sitting in tax free zones globally

    The notion that this extra tax will save our spending woes has got to be one of the biggest myths going. US centric but the rule is generic to all western countries:

    http://www.youtube.com/watch?v=QF1oCzcndHE

  43. wreckage

    We still need government infrastructure and services.

    Police and courts. Everything else can provably be done by the private sector quite well.

  44. .

    We still need government infrastructure and services. If you are suggesting complete laissez faire then everyone needs a gun and guess who will have the biggest walls and the biggest guns

    Fuck me you are behind the eight ball.

    There is no economic argument for that, only “under provision”, which may even exceed an efficient level of law and order and defence services.

    Slowly slowly Dot. A small rise becomes normalised – then another small rise. Maybe even the fact that it is changed at least the wealthy have to spend on their accountants and lawyers to figure out again how to evade the new rate – plus they pay removalists to get out of town. You totally ignore the creative creation of new markets where the middle class, now doing better and less in debt, can afford to be more entrepreneurial.

    PAYING ACCOUNTANTS TO AVOID TAXES CREATES WEALTH?

    Wow, you’re a winner, Alice.

  45. Tel

    I came across this recently, and I thought it might expand the conversation here.

    http://www.robert-h-frank.com/PDFs/NYT.4.12.99.pdf

    But income level isn’t everything. What the revisionists ignore is that increased spending at the top causes real, unavoidable harm to families in the middle, even those whose incomes have risen slightly. It harms them by raising the cost of achieving goals that almost every family cherishes.

    Few middle-income parents, for example, would rest easy with the knowledge that their children were attending below-average schools. But since the quality of public schools is closely linked to local property taxes, which in turn are closely linked to local real estate prices, you cannot send your child to a public school of even average quality if you buy in a school district whose house prices are well below average.

    You see what he did there? A successful person is guilty of making other people below average.

  46. DaveF

    Tel nice quote. Rich people really are evil !

    That would be in the US context, perversely the opposite is often true in Oz.

    Wealthy suburbs have fairly ordinary, bordering on dubious public schools because most parents send their kids to private and the public school has the ones kicked out from them or the poorer peoples kids (wealthy suburbs often have legacy Housing Commission, at least in Sydney).

    So the rich here ruin schools as well just in a different way. Evil !

  47. .

    Few middle-income parents, for example, would rest easy with the knowledge that their children were attending below-average schools. But since the quality of public schools is closely linked to local property taxes, which in turn are closely linked to local real estate prices, you cannot send your child to a public school of even average quality if you buy in a school district whose house prices are well below average.

    Huh?

    since the quality of public schools is closely linked to local property taxes

    Well the poor ought to accept regressive taxation and then the situation would improve.

    Another chucklehead (not you, Tel) who doesn’t get it. WHAT MATTERS IS IF YOUR PARENTS GIVE A CRAP AND MAKE YOU GO TO SCHOOL AND FEED YOU ADEQUATELY

    Thanks Tel.

  48. Tel

    So the rich here ruin schools as well just in a different way. Evil !

    Yeah, school funding works on a different level in Australia.

    Anyhow, you will get a good school if you first select well behaved and intelligent students. Doesn’t really matter if there are holes in the roof.

  49. William Bragg

    Rich people really are evil !

    Once again, Cat commentators betray their inability to deal with distributional issues in any way apart from from seeking to distort language to avoid confronting the real issues. Frank’s findings to no imply any guilt or evil on the part of richer folk – his is simply a finding about the effects of disparities in income on people’s wellbeing. Indeed, his is an efficiency argument; not an equity argument.

    Evoking the ‘evil’ tag in this case is as sensible as insisting that concerns about equity are always really about envy. The dictionary tells us that envy involves covering anothers’ possessions, but many people who want a more equal distribution in income have no desire to live the lifestyles of the rich. Explaining concerns about equity as ‘the politics of envy’, or insisting that any argument to reduce disparities must be based on some view that the rich are bad, is simply an infantile way for right-wingers to avoid confronting the issues.

  50. John Mc

    That’s just a piss weak brushing over of the well-known weaknesses, inconsistencies and dysfunctional nature of socialism.

    A society that allows people to use their talents to create wealth, that allows people to live and let live, that appreciates that people are individuals, will have financial as well as many other disparities. So long as everyone is better off and improving their lot in life, this is a good thing.

    A society that believes me must limit one to help another control their negative emotions, that is based on one group forcing their will on others in the name of some moral cause, that does not people are able to behave rationally or run their own lives, will be poor and unhappy.

    That’s the sum of it.

  51. DaveF

    Billy Bragg it was used ironically. The exclamation mark may have been a hint.

    Out of curiosity where would you peg the ideal GINI coefficient?

    We’re already at around .3…

    (Scandis are about .25)

    [for the record I think its a dubious measure which shows Afghanistan and and Belarus as paradises of equality rather than misery]

  52. JC

    Braggs

    US states have legislated minimum levels for school funding after which the state and federal support kicks in.

    You simply don’t understand enough about this subject or many others, quite frankly, to even discuss these things.

    You don’t discuss, you emote like all leftwhining trolls. In short get seat in the kitchen next to greys and turn on the gas, as both of you morons would be more useful that way. However don’t invite Kero boy if he’s holding a box of matches.

    A great deal about choosing to live in undesirable localities in the US is not about school halls, you fucking idiot. It’s concerns the parents have about who their kids are going to be associating with.

  53. Grey

    You don’t discuss, you emote like all leftwhining trolls.

    I resent that. For example I am a great believer in the Laffer Curve. I have, however, felt that the theory underpinning it is a little deficient and we can’t assume the Laffer curve operates similarly in every economic situation.

    To this end I have developed the Grey Coefficient to the Laffer Curve, a modifier which contextualises the Laffer curve to the economic parameters of each economy. I won’t bore you with the sophisticated econometric modelling underpinning the Grey Coefficient. Suffices to say, it turns out by some amazing coincidence that the Grey Coefficient always turns out to equal the top tax bracket of that economy minus 5.

    So if the economy is the UK the Laffer Curve (adjusted with the Grey coefficient) kicks in at 45% (top tax rate 50 – 5)
    If the economy is the UK the Laffer curve, Grey adjusted, kicks in at 40 (top tax rate 45% -5)
    If the economy is the US the Laffer curve, Grey adjusted, kicks in at 30% (top tax bracket 35% – 5. With the recent tax hikes the Grey coefficient will increase, but there is always a considerable lag before the appropriate economic indicators adjust themselves for this to happen – as I said, the modelling underpinning this is quite sophisticated.)
    Finally if the economy is NZ the Laffer curve kicks in at 28% (top tax bracket 33% – 5)

    Lefty – me? Bah humbug.

  54. William Bragg

    I haven’t said anything about socialism, John Mc – (although perhaps you simistically equate any move away from a pure free market position as socialism). Thus, you are criticising the strength of my defence of socialism when I was not in fact defending socialism.

    Dave F, you can only arrive at your interpretation of Afghanistan and Belarus as being paradises if you misuse the Ginni measure, using it in isolation as if distribution is the only thing that matters. No serioussees commentator makes that claim, so you are simply attacking a straw man – a common trait among Cats, admittedly.

    JC, if you’d like to explain how your latest spray relates to the argument I have been ,debating

  55. JC

    Greys

    The laffer curve is basically another name for supply side economics.

    I have no idea what your last comment is supposed to be saying as it’s incoherent.

  56. William Bragg

    … and how the ‘substantive’ points you make affect the veracity of anything i have said, I’ll consider them. Otherwise, I’ll just assume that you’re simply trying abuse and distraction, as usual, to cover over your intellectual deficits.

  57. Tel

    Frank’s findings to no imply any guilt or evil on the part of richer folk – his is simply a finding about the effects of disparities in income on people’s wellbeing. Indeed, his is an efficiency argument; not an equity argument.

    Hmmm, kind of difficult to reconcile, “causes real, unavoidable harm” with an efficiency argument. Sounds like a tort or something.

  58. Grey

    I have no idea what your last comment is supposed to be saying as it’s incoherent.

    Possibly, or possibly you are not brightest fairy light on the Christmas tree.

  59. Gab

    I’ll just assume that you’re simply trying abuse and distraction, as usual, to cover over your intellectual deficits.

    Says the moonbat Bragg that earlier also said:

    More simplistic right-wing twaddle from Kates

    and

    The upshot is that slaves to free market ideology, like Kates, having nothing worthwhile to contribute on discussions about equity.

    Sanctimonious and hypocritical moonbat who often pops in here late at night and just sprays abuse at any number of posters.

  60. William Bragg

    Lots of things cause harm to others, Tel – smoking, shooting people, reciting Vogon poetry. It is economically efficient that the associated costs be taken into account in policy settings (along, of course, with the costs of corrective actions). Exactly what policy response may be warranted is another debate, but the key point here is that the policy problem derives from efficiency concerns.

  61. Tel

    Gun control is an economic efficiency argument now?

    Hmmm, can you find examples of any recent media framing the school shooting that way?

  62. JC

    So the moron is suggesting that the lack of gun control, which he invariably thinks leads to massacres like the CT school, adds additional costs and therefore causes economic inefficiency.

    I’m honestly, for once, left speechless.

  63. William Bragg

    No. There are many ways any particular issue can be framed. That the media choose a particular way, that presumably suits their proposes and market, does not invalidate other ways.

    Bringing this back to Frank, he is an economist and his concerns re distribution are clearly couched on efficiency terms, not an equity framework. Alas, many commentators on this site appear to wrongly automatically equate arguments about distribution with arguments about equity, which they additionally wrong equate with the politics of envy.

  64. JC

    Possibly, or possibly you are not brightest fairy light on the Christmas tree.

    nope, I’m reasonably astute. Your comment is basically sludge.

  65. JC

    Alas, many commentators on this site appear to wrongly automatically equate arguments about distribution with arguments about equity, which they additionally wrong equate with the politics of envy.

    Greed and envy work equally well for me.

  66. John Mc

    Thus, you are criticising the strength of my defence of socialism when I was not in fact defending socialism.

    Yeah, bullshit. The tag ‘socialist’ is a dirty word and socialists like yourself have been trying to drop it for some time now. You are simply rebadging your philosophy to try to get another shot at popular support for your flavour of social and economic regulation.

    Please tell me how your philosophy of maximising financial equity by redistribution through progressive taxation differs from the socialist model?

  67. Tel

    William Bragg, I’ll give you a third chance to come up with some genuine evidence by pointing out for us where Frank puts together a framework and methodology for cost/benefit optimization, and thus a way of calculating how much the wealthy should be taxed. I mean any efficiency argument would need to be able to find the optimal point, right? Otherwise the whole argument would be a waste of time.

    Alas, many commentators on this site appear to wrongly automatically equate arguments about distribution with arguments about equity, which they additionally wrong equate with the politics of envy.

    An argument where a successful person is accused of real, unavoidable harm for no other reason than because they are successful… might as well put up a flashing neon sign, THIS IS ENVY.

  68. lotocoti

    I’m feeling a little embarrassed.
    There’s me thinking distributional issues was just a delicate distortion of language to put a pretty bow on that from each… to each… bolus of excrement.
    I apologise for assuming our friend was a stalwart advocate of socialism experimental economics. (Did i get the newspeak right?)

  69. wreckage

    According to William, calling socialism “socialism” is a distortion of language, but calling equality-of-outcome “efficiency” is not.

    Interesting.

  70. William Bragg

    I’m honestly, for once, left speechless.

    Nice while it lasted, WC. Still, its not surprising that you were befuddled by such basic economics as your comments clearly show that you know just enough economics, of the narrow kind, to be dangerous, though mainly to yourself. Try reading some Becker.

    I mean any efficiency argument would need to be able to find the optimal point, right? Otherwise the whole argument would be a waste of time.

    In fact, Tel, in the real world, all that is necessary for any such policy exercise to be worthwhile is that we move sufficiently far in the right direction (ie closer to optimality) to justify the costs involved in the exercise. Precision about optimality is not a requirement. Likewise, Frank does not need to undertake a full cost-benefit analysis or quantify an optimal Pigouvian tax to be mounting an efficiency, rather than equity, argument.

  71. William Bragg

    Some basic economic philosophy for wreckage, John Mc et al:

    A socialist economic system would consist of a system of production and distribution organized to directly satisfy economic demands and human needs, so that goods and services would be produced directly for use instead of for private profit[5] driven by the accumulation of capital. Accounting would be based on physical quantities, a common physical magnitude, or a direct measure of labour-time in place of financial calculation. Distribution would be based on the principle to each according to his contribution.

    Now, I know Cats, and Libertarians more generally, are fond of distorting the language, but even you guys would surely feel a bit hesitant about calling a market-economy coupled with a progressive tax and welfare system ‘socialist’ – unless, as I said before, you believe that anything other than a pure free market economy is socialism.

  72. DaveF

    Dave F, you can only arrive at your interpretation of Afghanistan and Belarus as being paradises if you misuse the Ginni measure, using it in isolation as if distribution is the only thing that matters. No serioussees commentator makes that claim, so you are simply attacking a straw man – a common trait among Cats, admittedly.

    No it isn’t a straw man. GINI is the only generally accepted measure of equity that I am aware of. I just don’t like it for the above mentioned point. My question to you was like with like: Oz GINI is around .3 and Northern Europe is .25 so what level would you like?

    Frank’s findings to no imply any guilt or evil on the part of richer folk – his is simply a finding about the effects of disparities in income on people’s wellbeing. Indeed, his is an efficiency argument; not an equity argument.

    I suppose that is an answer of sorts. High GINI isn’t a problem then, we all know that -like with like – high GINI has far more growth, hello Hong Kong, so there are more opportunities to become wealthy.

    Equality of opportunity, not equality of outcome. Its an efficiency argument.

  73. Tel

    Still no actual evidence huh?

    Likewise, Frank does not need to undertake a full cost-benefit analysis or quantify an optimal Pigouvian tax to be mounting an efficiency, rather than equity, argument.

    In the real world you need to know at least which direction you are going, which means you still need some sort of cost/benefit analysis or at least an outline of the basic tools to put one together. Can you find a place where Frank even provides a methodology, without needing to flesh in exact numbers?

  74. DaveF

    quantify an optimal Pigouvian tax

    A Pigue tax on wealth?

    I’m speechless.

    No I’m not. I just can’t coherently respond without excessive language.

    Someone has hacked his account, right?

  75. wreckage

    Dear Will: attributions please. If it makes you feel better I can call it whatever you like. However the use of socialism here, by me, is well within common usage. If you prefer I can call it a “RPABLRWALTMMFB Capitalist” system.

    Rich People Are Bad Let’s Redistribute Wealth A Lot To Make Me Feel Better Capitalism.

    So, whatever. Call it envy. You’re still talking total crap, and the fact that you’re now quibbling over the definition of Socialist pretty much just proves it.

    Do you have any point of any worth apart from your determination that Wikipedia says you’re not really a Socialist?

  76. wreckage

    I think it’s amazing that “from each according to ability, to each according to need” is now considered Capitalist.

  77. William Bragg

    So Tel, you can’t find a fully fleshed out efficiency framework in Franks’s 3 pager pamphlet. Not surprising.

    Read the pamphlet closely though and you will see that his concerns are about the effects of distribution on wellbeing; not on equity. Even the paragraph you quoted earlier makes that clear, if you read it closely.

    If you’re still not satisfied, try googling ‘positional externalities’ – an efficiency concept – and ‘wellbeing’ and you’ll discover various Frank papers, including this: http://www.aeaweb.org/assa/2005/0108_1015_0601.pdf.

  78. William Bragg

    So wreckage, according to you, a market economy coupled with a progressive tax system would be ‘socialism’.

    I’m speechless.

  79. .

    Once again, Cat commentators betray their inability to deal with distributional issues

    There are none. The issue is that the poor have no access to work and are taxed heavily.

    try googling ‘positional externalities’

    Buy a dictionary, look up “trivial”.

  80. .

    So wreckage, according to you, a market economy coupled with a progressive tax system would be ‘socialism’.

    Yes. It is, commonly called “market socialism”.

    So Tel, you can’t find a fully fleshed out efficiency framework in Franks’s 3 pager pamphlet. Not surprising.

    There isn’t one. He implicitly tells poor communities to tax themselves at a higher rate to solve an “equity” problem.

    It also misses out on a plethora of actual educational research, not just causation deficient, insipid rambling of an incompetent academic. How children are treated at home, matters far more than how much money a school gets.

    Unfortunately, some people are poor because they are wastrels and they happen to be poor parents as well. This is why their kids don’t have a shot at life. We know from Australian data welfare spend or above average per capita Government spend actually correlates with worse outcomes, and private schooling is more efficient in pure cost per student terms than public schooling, with better outcomes.

    You are simply incompetent camp follower, Bragg.

  81. DaveF

    Frank states that envy can be useful in that it enforces more fair distributions.

    His theories are certainly interesting….and revealing.

    His book was reviewed in a batch that included The Spirit Level. A thoroughly debunked read so I figure his has been as well.

    You know we have a certain sort of book review when:

    All are informative, original, and offer unusual insights. None accepts that social divisions are inevitable or natural, and all make coherent arguments in favor of less inequality, supported by persuasive statistics.

    We’ll call it the Freakanomics/Malcolm Gladwell rule: when the writers prejudices are reinforced the phrase “unusual insights” will be used.

  82. .

    None accepts that social divisions are inevitable or natural,

    Pseudoscience.

    and all make coherent arguments in favor of less inequality, supported by persuasive statistics.

    Thoroughly debunked.

  83. DaveF

    Its a gem of a book review. I hadn’t realised till the end it included the one that claims the violent death rate rises when the GOP is in government.

    Another one debunked.

    Maybe you’d better not nail your banner to Mr Franks mast Billy Bragg.

  84. John Mc

    So wreckage, according to you, a market economy coupled with a progressive tax system would be ‘socialism’.

    I’m speechless

    It depends on the level of individual rights that are afforded to citizens, but it would probably be social democracy i.e. the mild form of socialism where the government doesn’t directly nationalise too many businesses, but does have a total tax take of around 25% to 40% of GDP.

    It’s really not that hard. The progressive tax and redistribution element is socialism. The market economy bit is free market. Most economies are mixed.

    But you knew that and were just playing semantics.

  85. .

    But you knew that and were just playing semantics.

    Yet he’s speechless. Mendacious or a blockhead or both.

  86. John Mc

    I think he subscribes to old school socialism and is just clinging to the dream no matter what the evidence might say. That requires a bit of lying, a bit of stupidity and a bit of shutting up when you’re out of your depth.

  87. Jarrah

    “Yes. It is, commonly called “market socialism”.”

    Depending on who you are. I’ve heard it commonly called “state capitalism”.

  88. William Bragg

    While it is not unusual for Cats to misrepresent me or issue ‘challenges’ that I am supposedly meant to respond to, the reality is that I did not “nail my banner” to Franks, DaveF. Tel introduced Franks’ argument and my only point has been to indicate that the argument in Franks’ paper was an efficiency argument; not an equity argument. The paper I cited substantiates that point. Accordingly, criticisms and book reviews of merits of Franks work, whatever the validity of those criticisms and reviews, are entirely irrelevant to my criticisms of Kstes and Cats’ distortion of language, as set out in this thread.

  89. .

    Frank’s paper was an efficiency argument; not an equity argument. The paper I cited substantiates that point.

    Both of these statements are non factual.

  90. William Bragg

    Both these statements are non factual.

    How thick are you? The paper is about positional externalities. Externalities are market failures that give rise to inefficiency in the allocation of resources. This is Economics 101, though apparently beyond the comprehension of -.

    Once again, Cats have shown themselves incapable of understanding (or unwilling to acknowledge) the differences between distribution and equity, as well as between equity any envy.

  91. DaveF

    BB I appreciate the point you followed up on a Cat’s point but your follow up with another paper (yes I read it) from TFG means you’re using him as an appeal to authority.

    The guy is a chronic redistributionist who coaches it in efficiency terms.

  92. John Mc

    Once again, Cats have shown themselves incapable of understanding (or unwilling to acknowledge) the differences between distribution and equity, as well as between equity any envy.

    It’s clear now. If you call it ‘equity’ the reallocation of capital from the productive to the less productive is not redistribution. And if you just want the same amount of wealth as the person with more wealth, it’s called ‘equity’ and it’s not envy.

    And ‘equity’ will actually make us more efficient, wealthier and happier, depsite,……well, shutup.

    This isn’t really new, though. You guys have been saying stuff like this since you lost both the rational debate and the empirical evidence.

  93. William Bragg

    Even if I were somehow relying on Franks, DaveF, here is the key point.

    One may be a “distributionist” – your term – WITHOUT needing to rely on equity considerations, let alone envy. You have now effectively acknowledged this.

    So, when Cats automatically equate any argument for redistribution with envy, they are unwittingly (being charitable to them) making intellectual leaps.

    Now, you seem to dislike ‘redistribution’, and that is your perogative. But it is an infantile game to try to dismiss any argument for redistribution as being about ‘the politics of envy’. That, alas, appears to be about the only game most Cats are equipped to play.

  94. wreckage

    Oh, The Spirit Level is a classic. Less rigidly hierarchical societies are happier, and Japan is amongst the happiest nations on earth. Let that simmer for a moment. Next consider that TSL doesn’t consider suicide rates when measuring “happiness”.

    TSL is a failure even on its own terms. Even while cooking the books it still disproves its own main premise.

  95. JC

    Braggs… I’ve already told you that is a split between greed and envy. Somehow nothing ever seems to hit home with you. You knock on the door and there’s never anyone home, you nimrod.

  96. wreckage

    One may be a “distributionist” – your term – WITHOUT needing to rely on equity considerations, let alone envy

    No, one may not, except to the extent that one may claim to be reading porno mags for the insightful articles.

    But it is an infantile game to try to dismiss any argument for redistribution as being about ‘the politics of envy’.

    Human motives are what they are. I use envy in a more technical than derogative sense; people derive self worth and contentment in relative, not absolute terms, which is to say, they are driven by envy, not greed, generally speaking.

  97. JC

    There was a Yale study reported in by Reason Magazine which showed that people would find it acceptable to lose money themselves than to see another person do better than them. Envy was that strong an emotion.

    Envy is actually a very concerning element of human nature which some people are able to control and others aren’t. The piece went on to report that the researchers were so concerned with this human trait that public policy should always be mindful of it coming to the surface.

    Bragg dismisses it as some sort of delusion, which coming from the delusional crump who thinks he knows how JFK was really killed is fucking hilarious.

    Go away Braggs, you’re an idiot and you’ll never live down your JFK conspiracy theory and the fact you support the Iranian regime’s treatment of gays and stoning females.

  98. William Bragg

    No, one may not [be a redistributionist without relying needing to rely on equity considerations, let alone envy.

    Sorry wreckage but you’re a bit late. One may, and Franks already has.

    I use envy in a more technical than derogative sense; people derive self worth and contentment in relative, not absolute terms…

    Then, wreckage, given the definition of envy, you use the term incorrectly. Your admission is useful, however, as it is more evidence that Cats distort language for the purposes of their arguments.

  99. DaveF

    chronic redistributionist

    Was my term. Not distributionlist as you used. Minor correction.

    BB What you want to do is take my money and give it to strangers that fit your definition of needy.

    That starts with schools and ends with wind towers.

    Some I agree with, some I don’t.

    PS
    No one really said it was envy up comments. It was TFG who brought that in.

  100. JC

    Reason also reported on this Oxford study. Envy is so strong these people were willing to give up a large part of their own incomes.

    This is why I say the argument cannot be rational with the left as they would rather impoverish themselves in order that they limit the success and advancement of others.

    You cannot rationalize with people like this. This is also why I say that just as the left make laws to punish transgressors of their strongly held beliefs, the Right needs to make laws to prevent the left from attacking the successful as it seems envy is destructive and could be seen as a pathology.

    This nails it.

    Envy is behind the leveling spirit of socialism. A truly generous and rational soul would wish others well, especially if they have done no one any harm.


    Read more here.

    Research by two British economists, Daniel Zizzo of Oxford University and Andrew Oswald of Warwick University, suggests there is a good bit of truth behind that joke. In a recent study, Zizzo and Oswald ask, “Are People Willing to Pay to Reduce Others’ Incomes?” “The short answer to this question is: yes,” they report. “Our subjects gave up large amounts of their cash to hurt others in the laboratory.”

  101. JC

    I find it interesting also that the wealthy in those studies also played the envy game to by attempting to hold their rank.

    This is why you see people like Warren Buffet wanting to punish the success of others. He simply wants to hold rank while he’s still drawing breath…. the prick.

  102. candy

    That’s quite interesting JC. The old saying “eaten up by envy” comes to mind.

  103. William Bragg

    Kates started it in his original post with this comment:

    These people [lefties], they really don’t care that they harm economic prospects in general since it’s envy and personal greed that drive them.

    Kates simplistic world appears not to have space for other motivations for those, like me, who advocate redistribution (even though, in my case, I would be financially worse-off from a more progressive tax/welfare regime).

    PS: Regarding chronic redistributionist, sorry for the minor misquote.

  104. JC

    Dave F

    You’re a pretty poor debater. Leave Braggs to the adults as you’re fucking things up a little. well actually more than a little.

  105. JC

    Candy

    I’m also trying to find the Yale study that more or less sealed it. In other words the science is well and truly settled on this one.

    Braggs is wriggling around like a cut snake trying to deny this unfortunate trait in humans.

    He’s about as successful as Homer was suggesting Skanke Ho was a describing an Asian warlord’s wife. Braggs disguises his stupidity, dishonesty and rank ignorance by having slightly better prose than Homer though. That’s about all as differences go between those two meatheads.

  106. JC

    Kates started it in his original post with this comment:

    These people [lefties], they really don’t care that they harm economic prospects in general since it’s envy and personal greed that drive them.

    Braggs, you dishonest piece of shit, Kates is not being simplistic at all. He’s actually describing human behavior tested at some of the best leaning centers in the world. … Yale and Oxford.
    We’re not talking about Latrobe or the University of Butt Fuck Nowwhere.

    You ought to be smacked around the head for you abuse of Kates, you two bit dickhead.

  107. John Mc

    Billy has moved on to the second stage, viz: I’m actually a wealthy capitalist who would be worse off, but I’m advocating socialism on moral grounds.

  108. JC

    John Mc

    Sad as it sounds there are actually more than enough people like that.

    Warren Buffet is perhaps the worst example of envy driving thinking in the rich and his case the mega rich.

    I’ve seen enough of these disgusting slobs and these days I just let them have it with both barrels when previously I’d remain silent.

    If you read that study it shows that rich people also are envious too and seem to be so they hold rank in the pecking order.

    This could/should be seen as a serious pathology..

    The left has taken it and basically molded envy as part of almost all their economic policies. It’s a real problem.

  109. JC

    From Gab’s link.

    This paper studies utility interdependence in the laboratory. We design an experiment where subjects can reduce (“burn”) other subjects’ money. Those who burn the money of others have to give up some of their own cash to do so. Despite this cost, and contrary to the assumptions of economics textbooks, the majority of our subjects choose to destroy at least part of others’ money holdings. We vary experimentally the amount that subjects have to pay to reduce other people’s cash. The implied price elasticity of burning is calculated; it is mostly less than unity. There is a strong correlation between wealth, or rank, and the amounts by which subjects are burnt. In making their decisions, many burners, especially disadvantaged ones, seem to care about whether another person ‘deserves’ the money he has. Desert is not simply a matter of relative payoff.

    We keep asking ourselves how can the Kenyan make policies and defend them when clearly they are threaten economic growth and future prosperity.

    You basically have the answer there. He doesn’t give a rats about economic growth as long as the pie is divided to his socialist tastes.

    These are the people you’re dealing with.

  110. Gab

    He doesn’t give a rats about economic growth as long as the pie is divided to his socialist tastes.

    yeah, that’s the other issue with these envy- and greed-ridden socialists in that they believe resources (i.e money) is finite. “There’s only so much cash to go around so why should those who work hard and take the big risks end up with more of the cash?!” they wail. “It’s so unfair! So unequal!”

  111. Gab

    Billy has moved on to the second stage

    I remember when he used to slink in here late at night and post abuse at whomever posted such as Sinclair, Steve Kates etc. At that stage, everyone ignored his vituperative comments until one day someone responded to his comments and the rest, as they say, is history.

    There’s a lesson in there somewhere.

  112. William Bragg

    Warren Buffet is perhaps the worst example of envy driving thinking in the rich and his case the mega rich.

    You Cats still don’t get it, do you. You keep leaping to envy as the only possible explanation/motivation for redistribution. Think about it, exactly who is Warren Buffet envious of? Certainly not anyone else’s money, and certainly not WC’s brain. His reason for wanting redistribution is clearly to do with concern-for-fairness or other reasons; not envy.

    Still, good to see you Cats starting to learn a bit of basic modern economics. Today you’ve been taught that shooting people is an externality (who would ever have believed it!) and the difference between efficiency, equity and envy. Now, keep doing your homework and I’ll be back tomorrow with your next lesson.

  113. JC

    Gab

    Braggs has issues he needs to confront head on and deal with them. We simply aren’t trained to help him.

  114. Gab

    Braggs has issues

    He’s certainly up himself.

  115. JC

    Braggs

    We know you’re dishonest, but how stupid are you, leaving aside your mental issues?

    Okay lets do some more fisking as this is like shooting fish in a bowl… let alone a barrel.

    You Cats still don’t get it, do you.

    Umm yes we do dickhead. We understand it fully.

    You keep leaping to envy as the only possible explanation/motivation for redistribution.

    Nope, you’re lying again. People have said that’s one pathology- a very serious one. However there are also others.

    Think about it, exactly who is Warren Buffet envious of?

    That’s easy, Braggs. Buffet is envious of others success. The study clearly points out that. Rich people felt that emotion and acted on it for ranking purposes.

    Read up and stop making what are essentially redundant statements, you moron.

    Certainly not anyone else’s money, and certainly not WC’s brain. His reason for wanting redistribution is clearly to do with concern-for-fairness or other reasons; not envy.

    Nope, that’s not true and is clearly supported by the study I first raised and Gab linked you.

    This part of your aguement is done. It’s shot. Revisiting it again will only prove you are a dishonest imbecile.

    Still, good to see you Cats starting to learn a bit of basic modern economics. Today you’ve been taught that shooting people is an externality (who would ever have believed it!) and the difference between efficiency, equity and envy. Now, keep doing your homework and I’ll be back tomorrow with your next lesson.

    You worthless,cowardly piece of shit Braggs.

  116. JC

    He’s certainly up himself.

    Lol… Yea.. he’s like a poor mans Bird imitation.

  117. .

    How thick are you? The paper is about positional externalities. Externalities are market failures that give rise to inefficiency in the allocation of resources. This is Economics 101, though apparently beyond the comprehension of -.

    Once again, Cats have shown themselves incapable of understanding (or unwilling to acknowledge) the differences between distribution and equity, as well as between equity any envy.

    How thick are you, dummy?

    Positional externalities are trivial, like the loss a child has finding out Santa isn’t real.

    You have previously said the Government can tell us what we like.

    Obviously you don’t get it – you are dealing with humans, not characters in a fictitious book you are writing.

    There are no misallocation of resources from a positional externality. Pareto optimality cannot be improved.

    I have an infinite psychic loss from the imposition of any Government policy that tries to eliminate positional externalities or psychic losses.

    Of course Bragg’s idea is to mandate my preferences to change to not suffer such losses.

    To which, he can simply mandate all other positional externalities go away.

    Either he hasn’t thought this through or it is yet another dishonest cash grab by a left wing, big grubberment supporting sophist and serial bullshit artist…

  118. .

    You worthless,cowardly piece of shit Braggs.

    Indeed.

  119. JC

    Gab

    I forget, was it Braggs or Greys who came up with the JFK conspiracy theory and the Iranian government is a model of Jeffersonian democracy?

    I was Braggs, right?

  120. Gab

    Ah geez, JC they both look the same to me. I thought it was Grey.

  121. JC

    Was it Greys? Really? I thought it was Braggs.

    I honnestly can’t tell the two idiots apart.

  122. Tiny Dancer

    I’m pretty sure it was Grey.

  123. JC

    okay.. Braggs and Greys..

    Which one of you two idiots peddled the JFK bullshit along with the crap about Iranian being a liberal democracy.
    Fess up or deny it as either way works.

  124. JC

    Man we destroy lefties. The cat is a freaking killing field. Not one of hem has lasted without either getting booted for finally going bonkers or leaving because they went bonkers.

  125. William Bragg

    It was Greys, WC, but that hasn’t stopped you criticising me for it for the past couple of days. Still, that criticism has had more credibility than most of your others of me, for at least with the JFK comments you were responding to something that was actually said by someone on Catallaxy (I presume), rather than your normal technique of simply making stuff up and trying to verbal people.

    And so, your lesson for today is to remember to take your memory pills, along with your ritalin and viagra.

  126. Lazlo

    Which one of you two idiots peddled the JFK bullshit

    Coming in new to this so can’t see the context (after scrolling up for about a day).

    But as for JFK: if you have sat at the window in the Book Repository on Dealey Plaza, which is the official version of where Oswald soley did the deed, you must have some doubts..

  127. JC

    Okay Braggs so it was Greys. Big deal as i wouldn’t put it past you agreeing with him. I thought it was you mainly because you’re quite stupid wand seem to posses that false air of arrogance about you disguising what a cowardly asshat you are.

    In any event you’re both the same.

    (I presume), rather than your normal technique of simply making stuff up and trying to verbal people.

    What exactly have I made up about you, Braggs? The JFK and Iran stuff.\? It was an honest mistake, as I really can’t tell you two deadhshits apart most of the time. What else?

    And so, your lesson for today is to remember to take your memory pills, along with your ritalin and viagra.

    Stop projecting and keep it to the tread you imbecile.

    Positional externalities? WTF? Are you this much of a imbecile that you actually think you could pose that sort of swill here without a response?

    What the fuck are you going to do, Braggs tax people if they wear a more expensive suit to an interview?

    Moron.

  128. Lazlo

    Have you been to Dallas JC?

  129. JC

    Have you been to Dallas JC?

    Once

  130. DaveF

    Dave F

    You’re a pretty poor debater. Leave Braggs to the adults as you’re fucking things up a little. well actually more than a little.

    Do you want to start again?

    I thought we agreed on leaving things alone.

    This is midnight. I’ll use the drunk as fuck card against you.

  131. Lazlo

    You didn’t get to Dealey Plaza I’m guessing. Correct me if I’m wrong.

    I only did because I had half a day to spend. It was 1992 and Dealey was identical looking to 1963, incredible. Including the Grassey Knowle, the Repository (now a museum, so that’s how I managed to look out the same window), and over the back of the Knowle the railway yards.

    You could even stand in a place above the Knowle which would have had a perfect line of site to blow his brains out, and then escape quickly.

    Wereas standing at the window in the Repository it was like trying to shoot something close to your feet – a very steep angle.

    No conspiracy theory here, just observations..

  132. DaveF

    You can visit there? Nice.

  133. JC

    DaveF

    I’m not starting anything. I’m just making the obvious point that you’re a poor debater and required assistance in putting that moron away. Talk about snatching defeat from the jaws of victory….

    What’s the drinking card thing you’ll use? I’m a virtual teetotaler and only drink socially.

    Stop being nice to these idiots as there’s nothing to be gained from it. Watch and learn from the masters.

  134. DaveF

    DaveF

    I’m not starting anything. I’m just making the obvious point that you’re a poor debater and required assistance in putting that moron away. Talk about snatching defeat from the jaws of victory

    JC I’m sorry I responded to you.

    I won’t do it again.

  135. JC

    DaveF

    FFS
    You don’t have to respond. In fact I don’t want you to. Just watch and learn. That’s all and you’ll be a better person for it.

  136. JC

    DaveF

    Keep your word and stop fucking responding FFS. Stop being annoying. All I said was that you’re a poor debater, which is true.

  137. William Bragg

    Actually Dave, you’re quite a decent debater. You address issues calmly, raise points in good faith as far as I can see, admit when you are wrong and move on. The contrast with WC is pretty clear in those respects. Indeed, you having nothing to learn from him except how to make an asswipe of yourself. But there is one piece of advice from WC that is worth adhering to, and that is to just ignore him, rather than bothering to respond.

  138. JC

    Shut up Bragg…patting DaveF over the head does nothing to improve his lack of debating skills. It makes you look like a manipulating bad loser.

    Look dickhead, your entire argument was wiped out with a quick reference to that one study. Dot then cleaned the street of all the blood and guts with his arguments against your stupid positional externality crap.

    In other words you basically became roadkill over a few short comments while DaveF was bumbling around all day.

    You lost. Now go away.

  139. wreckage

    Braggs:

    Buffett is securing his position against latecomers. This is also well-studied and well-established behaviour. Those already at the top lose their desire for a world with social mobility and begin working to secure their gains. Pretty simple, and broadly speaking completely rational even in a greed-driven scenario, but more so when driven by envy.

    By the way, if you’re really offended by the use of the word “envy” to describe a strong drive to be relatively better off (rather than absolutely better off) we can relabel it “SDTBRBORTABR” to avoid the horrible, horrible ambiguity that plagues you for reasons so far rather opaque. Evidently if I say “envy” without rancour it no longer means “envy” and I am guilty of nefarious word games. The world must be a truly sinister place to you. Are you often frightened? Outraged?

    Now back to Buffett. The real clincher to the Buffett case is that the proposals he made hurt newcomers but not him. The man’s entire career is structured around tax efficiency; he altered from Graham’s approach specifically to avoid capital gains tax and pays little income tax because he has gone to lengths to avoid income tax. It is also quite legal for him to gift any amount he likes to the treasury, which he has never done to the best of my knowledge.

  140. wreckage

    Oh, and when Buffet dies, everything goes to charity; no inheritance tax for him, no siree.

  141. William Bragg

    The other advantage as a debater you have over WC, DaveF, is that you don’t claim victory, least of all when you’ve in fact just been whipped.

  142. William Bragg

    Neither frightened or outraged, wreckage: just trying to get you guys to use English properly, rather than trying to misrepresent the arguments of your opponents.

  143. the Grassey Knowle

    The Grassey grassy Knowle knoll. Merriman Smith weeps.

  144. .

    What the fuck are you going to do, Braggs tax people if they wear a more expensive suit to an interview?

    Lulz

    Positional externalities is the sleaziest left wing plot to punish private sector success. “Arguing on efficiency grounds” – lol, fuck me dead that’s outrageous. “It’s more pareto optimal to punish the poor for trying to succeed and redistribute more income of highly productive people like GPs or engineers”…

    What nonsense.

    Anyone who tried this crock and applied for research funding ought to be banged up for fraud.

    Anyone who actually believes in this bullshit is a nasty, misanthropic old tory who believes in a class system where there is NO upward mobility.

  145. .

    This left wing vomit is so out of context and ridiculous.

    Grey has the audacity to “recontextualise” the Laffer curve – idiot. It is simply a reapplication of the total revenue function. Empirically we know the Laffer curve works. US tax revenue for example, is fairly constant as a proportion of GDP, and backward bending labour supply in the Australian professions is also well known.

    The fact that Bragg brings up “positional externalities” as an issue at all is laughable. “Keeping up with the Joneses” is a problem?

    No. The problem is the Government over-governs and over-governs poorly.

    If you build a new home, you can pay a tax rate over 80% on the construction and development of the dwelling (so, 80% or more on the final sale price for off the plan) – after you have paid income tax and your boss has paid payroll tax. Everyone with a vehicle pays at present fuel taxes all up exceeding 1/3 of the pump price.

    You dullards. Recontextualise that information into your tiny little brains as to why so many people are stuck in the fucking rat race. It isn’t because they have personality defects that can be corrected with more taxation, you nasty shitheads.

  146. JC

    You dullards. Recontextualise that information into your tiny little brains as to why so many people are stuck in the fucking rat race. It isn’t because they have personality defects that can be corrected with more taxation, you nasty shitheads

    Liberty quote? Go on Sinc , it’s a beaut.

  147. JC

    Oh, and when Buffet dies, everything goes to charity; no inheritance tax for him, no siree.

    Buffet is a good investor, one of the great ones, although I think his talent lay in being able to hold what turned out to be great stocks forever allowing the magic of compound interest to work.

    However he’s a truly evil intentioned bastard and the hypocrisy just oozes out of him.

  148. John Mc

    Anyone who tried this crock and applied for research funding ought to be banged up for fraud.

    The efficiency argument for redistribution is in the same category as Phil the Freak’s argument for productivity improvements by increasing wages so people can buy more of the goods they produce to speed up the rate ‘the whole thing is turning’.

  149. JC

    The efficiency argument for redistribution is in the same category as Phil the Freak’s argument for productivity improvements by increasing wages so people can buy more of the goods they produce to speed up the rate ‘the whole thing is turning’.

    Are you bullshitting? Someone actually fronted up with that? Where was it published?

  150. JC

    As I said, this is a killing field for lefties.

    People, please make sure you don’t tread on sharp edged bones when walking around the place as we try to maintain the best standards in Occupational health and safety at the Cat.

  151. Alice

    From what I can see JC all you maintained last night was a string of invective aimed at DaveF who I happen to like.

    Id suggest you work on your own standards tough guy!

  152. Tel

    Tel introduced Franks’ argument and my only point has been to indicate that the argument in Franks’ paper was an efficiency argument; not an equity argument. The paper I cited substantiates that point.

    I read through that paper and no it does not make an efficiency argument. Frank claims there is a conflict between individual and collective interest, and yet nowhere in the paper does he define what he means by “collective interest”.

    Frank claims “people consume too much housing and too little leisure” … is that based on his judgement of their individual interest, or their own judgement of their own individual interest? Is that based on some undefined collective interest? Who gets to decide this and how? What is the right mix of housing and leisure?

    Frank talks about THE Utility Function” which makes it sound like a global utility function, but on closer inspection he is talking about individual preferences. Essentially he is saying that individuals use a mix of greed and envy as the basis for their economic preferences, and depending on the context and the type of goods, that mix is likely to change (i.e. his distinction between positional and non-positional goods).

    OK, there’s some merit in that as a model of individual preferences. I would agree that both absolute and relative improvements can influence individual decisions, but Frank completely ignores individual variability. Maybe he didn’t have space or something, but without differences between individuals you can’t actually have an economy, because you have nothing to trade.

    I still can’t find anywhere even a basic framework by which any sort of optimization could be done. It’s nothing more than the “ask Frank” methodology, all too common with socialists. They will eventually just declare they are the smartest guy in the room, and they would fix things, if only everyone just followed instructions.

    Let’s look at the further implications of Frank’s paper. Suppose individual utility does involve relative preferences, so now uncle Frank comes along and finds a way to prevent them getting what they want, so now they have less utility right? Worse, they have lost personal sovereignty and Frank is going to need his enforcers to keep the scheme going, so we have to consider the lost utility from that as well.

    The median household must keep pace with community spending on housing or else send its children to below average schools.

    This fascination with the median being below average. Let me give a quick lesson in statistics. You have a thousand people, each earning a thousand dollars per week. Median earnings: $1000, Mean earnings: $1000 — perfect equality.

    Along comes 10 extra people who earn $10k per week, new Median earnings: $1000, new Mean earnings: $1089 — oh no! Those ten people just made a thousand other people below average. The society holds a quick democratic referendum on the question, “Should we shoot the ten rich bastards?” and a thousand people vote YES, ten people vote NO, and the population goes back to perfect equality once more.

    But this incident gives them an idea, they can import a hundred new people, and pay them a mere $10 each, force them to live in poverty and generally treat them like trash. New Median earnings: $1000, new Mean earnings: $955 — Woo! Hoo! Almost everyone is above average. The creation of an underclass has transformed our society into Utiopia, now everyone can look down on these “untouchables” and everyone can be happy (well almost everyone, but hey, this is Democracy right).

  153. Grey

    Is it called the Laffer curve because people who deploy it are generally Laffing at its shoddy methodology?

    I hope so, the would wipe the smirk of the faces of those who call Economics the dismal science. I give you the Laffer curve – neither dismal nor scientific.

  154. JC

    From what I can see JC all you maintained last night was a string of invective aimed at DaveF who I happen to like.

    I didn’t “invect” DaveF. The idiot was losing the argument until Dot and I intervened on his behalf and sent that moron, Bragg packing. I simply told Dave F he isn’t a very good debater, that’s all.

    The other night he was commenting on my behavior so there’s no reason to just single me out if I comment about him.

    I also don’t care if you like him or not Alice. Get a hotel room if you feel that way.

    Id suggest you work on your own standards tough guy!

    I do. I’m always mindful of the fact that I’m a gentleman.

  155. candy

    Alice, JC is terrifically smart and funny. The Catallaxy would be lost without him.

  156. Tel

    William Bragg:

    The other advantage as a debater you have over WC, DaveF, is that you don’t claim victory, least of all when you’ve in fact just been whipped.

    Recursive irony! Very amusing.

  157. Alice

    So is Davef candy.

    JC – you did invect Davef last night. He didnt lose any argument. You launched a first attack with an insult (now I see you feel aggrieved over a comment Dave made a few days ago!). You have to admit that.

  158. John Mc

    Are you bullshitting? Someone actually fronted up with that? Where was it published?

    It was Phil the Freak a long time ago now, JC. I wouldn’t know where to find it.

    But it’s not that uncommon, I’ve heard it a number of times.

  159. JC

    Alice

    I don’t feel aggrieved at all. The idiot was stealing defeat from victory’s jaws and it pissed me off as that twit Bragg should have been pushed over the proverbial cliff ages ago.

    Look how that loser Bragg was being nice to him and all. Everyone wants a debate opponent like Dave F.

    He was an embarrassment.

    Go buy a bottle of gin and stay out of this. It’s really none of you business.

    You said you drink gin in the morning’s, right?

  160. .

    I hope so, the would wipe the smirk of the faces of those who call Economics the dismal science. I give you the Laffer curve – neither dismal nor scientific.

    You rambling idiot. The laffer curve is a reapplication of a simple principle well known in microeconomics and marketing, and proven empirically on a macro scale. It also logically must exist. There is a maximum amount of revenue a Government will collect between no taxation and a confiscatory tax regime, the same way a firm maximises revenue from a product between a price of zero and pricing at the total disposable income of the target market. It has been a concept known since the Muslim period of enlightenment (Ibn Khaldun) and known in economics to people as diverse as Cournot and neo Keynesians who infer there may be an optimal savings rate.

    It is pretty sickening there is a lefty tag team of a complete economic ignoramus (Grey) and a charlatan who should know better (Bragg). What Grey doesn’t know is rather distastefully backed up with high highfalutin, BS theories that are conceptually incorrect and inconsistent on foundational theory, contextualised out of the real world and empirically bunk.

    What we have is a ignoramus arguing that the Government ought to increase taxes as there are no efficiency issues and a charlatan saying that we can improve pareto optimality by punishing reward for effort further, we can increase efficiency yet more.

    The upshot is that they want anyone who works for competitive or outcome based incomes to be taxed at a higher rate with a much more progressive scale that cuts in much earlier.

    They don’t give a damn what this means to the hip pocket of the working poor, those trying to get a job or those trying to pay off their home earlier or retire sooner.

    Any dynamic effect on economic growth, or well being, is simply ignored.

    The fact that something as non materialistic as early retirement actually requires an early accumulation of wealth is derided as “materialistic”…yet they complain about “keeping up with the Joneses” but want us to be in a rat race until we are 70 or so. Their arguments contradict and are untrue by definition. The upshot of the Frank paper is that the poor – ought to tax themselves more! The paper is also so out of context as to the REAL reasons why educational outcomes differ – what matters is a stable home life with responsible parents. That separates the wheat from the chaff. What school you go to simply determines how hard the teachers push you. What we do know from the Australian data is that private schooling is more efficient with better outcomes and how much money the Government spends on you can mean bugger all as to your or your descendant’s economic welfare, health, happiness, lifespan, educational attainment or upward mobility.

    This is just the rank avarice of a modern day upper class who don’t want to do any real work and who hate the poor.

    There is no consistency or logic – just a demand for higher taxes and greater Government spending.

  161. Grey

    There is a maximum amount of revenue a Government will collect between no taxation and a confiscatory tax regime, the same way a firm maximises revenue from a product between a price of zero and pricing at the total disposable income of the target market

    I was reading a book about Winston Churchill and the writing of his war memoirs. He had a marginal tax rate of 95% – it did tend to dampening his desire to write. Although the author estimates he was paid around $50 million in today’s money (with all the caveats about how meaningful those kind of calculations are).

    I am sure that there will be a maximum amount of revenue a taxation system can yield, simply in its application the maximum amount of revenue miraculously always appears to be just below whatever the current top tax bracket is. Hence its shoddy methodology.

  162. Tel

    Alice, JC is terrifically smart and funny.

    What he lacks in subtlety, he makes up for with enthusiasm. May I propose a rule whereby abusive language is allowed but repeats are frowned upon? I’d like to encourage greater depth of colour in the put-downs.

  163. .

    I am sure that there will be a maximum amount of revenue a taxation system can yield, simply in its application the maximum amount of revenue miraculously always appears to be just below whatever the current top tax bracket is.

    No.

    The US has had little variation to Federal income tax collected as proportion of GDP.

    You are making shit up. The optimal tax rate for the US for example, is significantly lower than 95%, or even the current tax rate.

    It’s the fault of the analysts, not politicians, that’ we’re consistently on the right hand side of the Laffer Curve?

    The only thing shoddy around here are your synapses, you degenerate.

  164. Grey

    You are making shit up. The optimal tax rate for the US for example, is significantly lower than 95%, or even the current tax rate.

    How is the fact Winston Churchill faced a marginal tax rate of 95% got anything to do with US tax rates?

    Talk of making things up….George Bush snr called it voodoo economics for a reason.

  165. JC

    What he lacks in subtlety, he makes up for with enthusiasm.

    I’m very subtle Tel. Possibly the most intricately subtle person here.

    As for your suggestion. No. If it’s good it’s worth repeating.

  166. JC

    Greys

    I keep repeating to you, you nimrod. Those high tax rates at the time, particularly in the US also came with huge amounts of deductions and tons of tax sheltering.

    You keep taking your eye off the ball.

    The income tax take in the US has been a steady 18% of GDP. All high tax rates have done is make politicians more powerful as people suck up to them for tax breaks.

    Are you related to Braggs, because you’re as stupid as him.

  167. .

    How is the fact Winston Churchill faced a marginal tax rate of 95% got anything to do with US tax rates?

    Idiot, no one mentioned Britain until you brought it up.

    What happened to Britain after the war?

    Three decades of decline and misery. Why do you think so many Brits emigrated out of there and came here during that period?

    Talk of making things up….George Bush snr called it voodoo economics for a reason.

    So now, you are admitting to your previous dishonesty where you made a pretence to accepting the truth of the laffer curve – you now deny there is any such effect.

    Bush Snr was a weak President who raised taxes and fought a war with little outcome.

    Kennedy, Putin, Eisenhower, Hawke, all cut income tax rates significantly and saw a supply side boom in GDP and tax revenues in real terms.

    Stop this brain dead, thread derailing nonsense, you bullshit artist.

    “Voodoo” was a nasty and cheap rhetorical debating tactic of Bush in the face of a superior candidate. Reagan was very gracious to take him as his VP candidate.

    It’s “voodoo” that empirical evidence shows works.

    It’s not “voodoo economics” at all. It is solidly grounded in theory, repeats a microeconomic principle and is repeatedly demonstrated to be true in a micro and macro setting.

    Yet, you and bozo bragg have the temerity to call for more taxes without a damn about the dynamic impacts, even so far as to tax upward mobility. Positional externalities are the most fraudulent concept economics has seen since the Mississippi Company.

  168. JC

    Positional externalities are the most fraudulent concept economics has seen since the Mississippi Company.

    Bragg is only parroting what every leftie in the Liars party and the Greenslime believe anyways. He’s such a moron. And what a fucking attitude too.

    Leftwing Central needs to send us better pinatas.

  169. John Mc

    Leftwing Central needs to send us better pinatas.

    I think that sentence is wonderfully apt for the Cat!!!

  170. John Mc

    Hang ‘em up and take turns bashing the fuck out of them from different angles just for fun!

    We do it a lot more than even we like to admit!!

  171. Grey

    It’s “voodoo” that empirical evidence shows works.

    If by work you mean “create large deficits and large debt mountain for future generations to pay off” well, yes, it worked a treat for Reagan.

    His average budget deficit for his 8 years in office was 4.2% of GDP. Compare than to Swann, about which you froth at the mouth, 3% of GDP 2011-2012

    But I think we find if its Reagan, then budget deficits don’t matter, if it is Swan, then its the end of civilisation as we know it.

  172. John Mc

    Reagan was fighting the Cold War, which was to save civilisation as we know it.

  173. JC

    Shorter greys

    School halls, lurch Rudd insulation fiasco = winning the cold war

    You delusional fucking moron greys.

  174. Grey

    Reagan was fighting the Cold War, which was to save civilisation as we know it.

    LOL. And of course Bush was fighting terrorism, so he can run up as big as deficits as he likes.

    Its only when we get Muslims born in Kenya in the White House that we need to get upset about deficits.

    Anyway, the empirical evidence was the Laffer curve in the instance of Reagan was a dud – regardless of whether or not he was saving civilisation. His claim that cutting taxes would cut the deficit – it didn’t, it increased it 60% over Carter.

  175. .

    If by work you mean “create large deficits and large debt mountain for future generations to pay off” well, yes, it worked a treat for Reagan.

    No. Revenue and spending are not the same thing. He failed to cap spending and stand up to a Democrat Congress.

    LOL. And of course Bush was fighting terrorism, so he can run up as big as deficits as he likes.

    Please explain how bombing Gadaffi caused the 1990-1991 recession?

    Imbecile.

  176. Grey

    Please explain how bombing Gadaffi caused the 1990-1991 recession?

    Is it me or are people here perpetually angry and incoherent?

    Dot, you’ve got me. Tell me, how did bombing Gadaffi cause the 1990-1991 recession.

  177. John Mc

    LOL. And of course Bush was fighting terrorism, so he can run up as big as deficits as he likes.

    Bush was fighting terrorism, that’s why military action is morally justifiable. It just wasn’t a good decision on a cost/benefit basis.

    That’s a bit more difficult with Reagan as he won the Cold War, and left the economy in good shape to resume business as usual. He also did it with panache.

  178. John Mc

    Is it me or are people here perpetually angry and incoherent?

    Neither, you’re just another piñata as JC described above, and we’ve just found some extra big sticks!

  179. Grey

    Its pretty simple.

    Reagan cut taxes, so revenue went down and not up (as anyone with half a brain would realize it would)
    http://www.econbrowser.com/archives/2011/07/pipedream.gif
    Cutting taxes after 1980 quite clearly did not lead to increased revenue. Maybe someone could do a linear regression of dog registrations and superbowl ratings to prove it did, but by any normal standard measure it didn’t.

    He also increased spending leading to blow-out in budget deficits.

  180. Grey

    Neither, you’re just another piñata as JC described above, and we’ve just found some extra big sticks!

    Only in your delusional echo-chamber. The entire left and centre think you are nutjobs and the mainstream right think you are useful idiots.

  181. .

    Tell me, how did bombing Gadaffi cause the 1990-1991 recession.

    You seem to think fighting legitimate wars isn’t an appropriate use of public funds.

    I think Reagan spent too much.

    You really, truly are an idiot Grey.

    You know spending too much money causes recessions – but as long as the budget is balanced, then there are no adverse consequences on GDP. Extremely high tax rates – you claim they are not inefficient, but you don’t suppose if we doubled or tripled the budget then we’d suffer adverse consequences.

    You have really dug your own grave here.

    You are arguing that the laffer curve has no application or currency yet you also believe at the same time that deficit spending is bad.

    Basically all you are arguing for, off a set of baseless theoretical assumptions and in the face of empirical evidence, is for a command and control economy, as long as they balance the budget every year, unlike Keynes.

    You are arguing, contrary to theory and evidence, that the tax rate, choice of taxation base and Government spending as a proportion of GDP has no impact on GDP growth, economic welfare or “equity”.

    This is not backed up by Hauser’s rule at all which supports The Laffer curve. Furthermore, you are arguing that the efficacy of Government spending is related to the level of collection. In addition to this, you are saying that in a very extreme conditional way, that the cost of funds is not related to tax, indeed, there is no deadweight loss, and even at negligible borrowing rates, direct taxation is always superior to borrowing.

    No doubt at the same time you believe Wayne Swan saved us from a recession by borrowing money to be spent on consunmption – saving 120 000 jobs at the cost of $358 000 per job.

    Anyway, the empirical evidence was the Laffer curve in the instance of Reagan was a dud – regardless of whether or not he was saving civilisation. His claim that cutting taxes would cut the deficit – it didn’t, it increased it 60% over Carter.

    You are really, really stupid.

    The deficit, is not solely dependent upon revenue.

  182. John Mc

    The ‘entire left’? Oh my, I guess we’d better have a good hard look at ourselves then.

  183. .

    Reagan cut taxes, so revenue went down and not up (as anyone with half a brain would realize it would)

    No. Stop lying. Spending growth outpaced revenue growth.

    http://www.treasury.gov/resource-center/tax-policy/tax-analysis/Documents/ota81.pdf

    Figure four shows that Reagan cut taxes and increased revenue.

    Shut up you clown.

  184. Token

    I think these guys will need to fix the problem by voting for more tax increases…

    CA Tax Revenues Continue to Drop Despite Tax Hikes

    On Tuesday, California released a report that revealed state tax revenues have plummeted even further below Gov. Jerry Brown’s (D) estimates, even after residents voted to increase taxes via Proposition 30 in November’s elections.

    At the end of November, “taxes were 3% short in the fiscal year that started in July,” which is “a gap of $936 million.” The state was 0.7% short a month before.

    …As more of California’s taxpaying residents and businesses flee the state due to its burdensome taxes and regulations, California’s government loses out on their tax dollars. Meanwhile, the state government continues to spend more on various programs even as the state has fewer taxpayers to pick up its tab.

  185. Just like Krugman the real issues are not being looked at.

  186. Grey

    You are arguing that the laffer curve has no application or currency yet you also believe at the same time that deficit spending is bad.

    Oh for a libertarian with functional literacy, I have repeatedly said the Laffer curve has application but its application is based on shoddy methodology. Did I not point out Winston Churchill and his 95% marginal tax bracket?

    Here is the UK Treasury modelling that suggests a Laffer curve maxing at between 45 and 50%.
    http://blogs.spectator.co.uk/coffeehouse/2012/03/behind-osbornes-50p-tax-change/
    You can’t simultaneously accept this modelling and then try an argue a Laffer curve maxing at 33% for the Bush tax cuts.

    That’s the point, it is not that there is no Laffer effect, but its application is always based on pure political opportunism.

    No. Stop lying. Spending growth outpaced revenue growth.

    http://www.treasury.gov/resource-center/tax-policy/tax-analysis/Documents/ota81.pdf

    Figure four shows that Reagan cut taxes and increased revenue.

    You sad clown. You can’t even read your own graph.
    1981 – Economic Recovery Tax Act of 1981 shows a decrease in revenue of around $90 billion average per year over two years after introduction.
    1982a – Tax Equity and Fiscal Responsibility Act of 1982 – shows about 30 billion was clawed back over the same period. The next 6 tax bills to 1987 show perhaps another 30 billion being clawed back.

    Is that funny or is that sad? Or is it both? You are not a liar, you are too stupid to know are wrong.

  187. Grey

    I have repeatedly said the Laffer curve has application but its application is based on shoddy methodology.

    Sorry that was alphabet soup.
    Take 2:
    I have repeatedly said the Laffer curve has validity, but its application in particular cases is based on shoddy methodology.

    It is not that there is no Laffer curve, but it is a moveable feast. I am not sure what a moveable feast is, to be honest, but I have no doubt that the Laffer curve would be one, whatever it is.

  188. .

    I have repeatedly said the Laffer curve has application but its application is based on shoddy methodology.

    This is a non sequitur. It is also meaningless.

    Here is the UK Treasury modelling that suggests a Laffer curve maxing at between 45 and 50%.

    Maximising revenue doesn’t maximise economic welfare.

    You can’t simultaneously accept this modelling and then try an argue a Laffer curve maxing at 33% for the Bush tax cuts.

    I don’t accept that modelling. That is precisely the point.

    You sad clown. You can’t even read your own graph.

    You are thick. The graph shows an increase in revenue. Cut the bullshit.

    I have repeatedly said the Laffer curve has validity, but its application in particular cases is based on shoddy methodology.

    No you have not. Furthermore you cherry pick cases where taxes are higher.

  189. Why is everyone talking about irrelevant talking points?

  190. Grey

    You are thick. The graph shows an increase in revenue. Cut the bullshit.

    Of course it does, dot, old sport. Just not for the Economic Recovery Tax Act of 1981. It shows the biggest drop in tax revenue in constant dollars for the whole period 1968 to 2006.

    Oh dear.

  191. .

    It is not that there is no Laffer curve, but it is a moveable feast. I am not sure what a moveable feast is, to be honest, but I have no doubt that the Laffer curve would be one, whatever it is.

    Hauser’s law, that US income tax revenue basically doesn’t deviate from 19.5% of GDP, but the fact that higher taxes reduce GDP growth, mean that US taxes should be cut back to their lowest level – and that the Laffer Curve for the US is skewed strongly to the left, whereas the central point is well below a 50% tax rate.

  192. Grey

    Oh wonderful, have you located the bar on the graph for the Economic Recovery Tax Act of 1981 yet?

    What does it show?

  193. .

    You really are full of shit Grey. Beforehand you couldn’t tell the difference between revenue and the net budget position now you can itemise budgets by year and their medium term revenue effect.

    You simply deviate constantly as new facts come in. You’re a whore, basically.

  194. Grey

    Tell me dot, was finding this graph and the *ahem* courageous interpretation your own work? Or is this something libertarians pass around among each other?

    Oh please please please tell me the second one is true! Are that Gods that kind?!

  195. Ok no one will bite, so I will spell a little bit out. What does a certain tax rate have to do with the whole tax rates? Class warfare, well that is me, there are many groups I wish to fight, not the individual though as there are many individuals in the groups that are good.

  196. Gab

    So the only rebuttal Grey has to your information, DOt is childish sneer. No arguments, of course; I guess you’ll need to explain it to him in simpler terms so he can understand.

  197. Gab

    Grey does sorta remind me of JC’s carbon slave …what was his name?

  198. Grey

    So the only rebuttal Grey has to your information, DOt is childish sneer. No arguments, of course; I guess you’ll need to explain it to him in simpler terms so he can understand.

    Come on Gab, all we have to do is agree that this graph – rightly or wrongly, we aren’t dealing with raw data here so you are free to contest its assumptions – shows that the Reagan tax cuts of 1981 resulted in the largest drop in revenue in constant dollar terms since 1968.

    Once we have that settled we can ponder where we should situate the Laffer curve. But obviously nowhere near the Reagan tax rates of 1981, due to the unambiguous empirical evidence!

  199. .

    Oh wonderful, have you located the bar on the graph for the Economic Recovery Tax Act of 1981 yet?

    What does it show?

    The assumption is that revenue is from growth, which is not driven by tax rates at all.

    The table just shows “forgone revenue” assuming no dynamic effects, the chart shows net revenue effects.

    Maybe you’re too thick to realise that excessively high income tax rates will destroy revenue elsewhere.

    Tax cutting by Reagan increased revenue. Reagan had higher capital intensity as a proportion of GDP than his successors and economic growth – thus capital growth was high.

    Stop trying to rewrite history to suit your agenda.

  200. Gab

    Ah yes, I remember now, JC’s carbon slave was METRO.

  201. .

    Come on Gab, all we have to do is agree that this graph – rightly or wrongly, we aren’t dealing with raw data here so you are free to contest its assumptions – shows that the Reagan tax cuts of 1981 resulted in the largest drop in revenue in constant dollar terms since 1968.

    No, you are too stupid to realise the difference between a graph and a table.

    Or what they mean.

    Once we have that settled we can ponder where we should situate the Laffer curve. But obviously nowhere near the Reagan tax rates of 1981, due to the unambiguous empirical evidence!

    Hausers Rule. US tax rates should be set at the lowest possible level. That is assuming that we even want to maximise revenue, which we probably don’t.

  202. Token

    Come on Gab, all we have to do is agree that this graph – rightly or wrongly, we aren’t dealing with raw data here so you are free to contest its assumptions…

    What can not be argued is that where-ever that point is on the Laffer Curve, California/New York/Illanois are on one side and Texas/Arizone & Nevada are on the other.

  203. Grey

    Figure four shows that Reagan cut taxes and increased revenue.

    Figure 4
    -
    Tax Bill Revenue Estimates in Constant Dollars, 1968 -
    2006 (Annual average for first two years after enactment)

    This is unworthy of the noble cause of libertarianism, Dot. What would John Stuart Mill say if he saw your squirming, what would Hayek, what would Ludwig von Mises (or whoever), what Ayn Rand say?

    Come now, just graciously admit you made an error and we all move on.

  204. I am dismayed that no one seems to be considering tax in an holistic manner. Krugman’s argument only holds true when talking about salaried or wage earners, what about the rich? I am a small time investor and even I can work out if I am American to invest overseas and not pay any tax until or if I repatriate the money. Also even within the US it is only dividend income that might be taxed higher so form a company if you are rich enough. The rich and very rich are mostly investors of some sort or another.

  205. .

    WHAT FUCKING ERROR?

    The graph doesn’t relate the the figures in the table. The revenue estimates are positive.

    Fuck off and stop trolling.

    SQUIRMING? WHAT FUCKING SQUIRMING? I refer to a graph and you quote a fucking table.

    You dishonest, oily, shithead.

  206. Tel

    Anyway, the empirical evidence was the Laffer curve in the instance of Reagan was a dud – regardless of whether or not he was saving civilisation. His claim that cutting taxes would cut the deficit – it didn’t, it increased it 60% over Carter.

    Firstly, the US economy was deep into stagflation under Carter and going nowhere, which is why Carter got the boot (very rare for a US president to be booted second term). This limited Regan’s options and would have been a problem for anyone, including Carter.

    Secondly, the benefits of Regan’s tax cuts fell somewhat onto the state governments, because economic growth and lower federal taxes provided an advantage for raising state revenue. The states spent the money on services to citizens, which isn’t entirely a bad thing.

    Thirdly, Regan locked himself into an arms race with the Soviets, including his expensive but useless “Star Wars” plan. This was a mixed blessing, it accelerated the demise of the Soviet central planning system, because they just couldn’t keep up, but it also created a US public debt that has yet to be paid back. We simply don’t know what else could have been done, but the actual outcome was at the very least a good outcome for Eastern Europe, no longer under the yoke of Stalinism and able to join the modern world.

  207. Gab

    Dot, you shouldn’t be yelling at him. It’s like yelling at sheep, they have no idea about such things as graphs and tables, taxes and spending anymore than Grey does.

  208. To all above unless you can recite the Bible or Torah or Koran (less text than US tax law currently) and can inlude all tax rates and deductions any assertion you make is irrelevant.

  209. Tel

    I agree though that Regan promised to shrink the size of the state, and he failed in this promise. I think that’s well understood, I even vaguely recall that he admitted it.

  210. .

    Kelly.

    Clearly it doesn’t. There are some dishonest, incredibly stupid, left wing, Obama supporting morons who think that higher taxes lead to higher investment, as reinvestment isn’t taxed.

    They are too stupid to even think as clearly as Krugman considering all angles. They just forget that investors aim to increase their wealth. If they wanted to do capital appreciation, they could do it on their own and Ricardian equivalence means a 40% exit tax is still a 40% exit tax.

    They are not better off avoiding tax for years and paying more – they could simply avoid paying and exit at a lower rate at an earlier date.

    Simple concepts in capital budgeting, such as NPV, IRR and the payback period, show that this is contrary to their aims, and of course, more risky.

    To be compensated – they’d need a larger annual average ROI. Why would this be higher if payback periods were longer and cashflows were lower?

    It simply cannot work. The net result is less capital investment.

    Professional investors aim to maximise returns, not minimise tax in negative gearing.

    If Krugman and I are incorrect, then the US would have no benefit in terms of capital investment stock or growth rates by abolishing income tax.

    This flies in the face of basic microeconomics applied to public finance, published by various economists, as undergraduate level readings, even Stiglitz.

    The only way this can be true is if savings reduce investment. That is only true when contractionary monetary policy is practised. The FX appreciation makes up for this in part that the terms of trade are higher and part of this appreciation is from foreign money market inflows and previous direct investment inflows.

  211. .

    Secondly, the benefits of Regan’s tax cuts fell somewhat onto the state governments, because economic growth and lower federal taxes provided an advantage for raising state revenue. The states spent the money on services to citizens, which isn’t entirely a bad thing.

    Reagan grew GDP, cut unemployment, increased labour force participation, real wages grew and inflation fell. Dividends and asset appreciation grew.

    He would have been great if he had more a more disciplined approach to expenditure. The 1990-91 recession would have been far less severe.

    ———————————–

    Kelly

    Simple concepts in capital budgeting, such as NPV, IRR and the payback period, show that this is contrary to their aims, and of course, more risky.

    What I mean by “this” is option 1, a higher tax rate, as in this approach that statists and socialists desire. Not the lower tax, lower risk, less time consuming investment option!

    It doesn’t work. It means investors aim to increase the investment pool without a risk reward premise. In fact, they are asked to lower their return for higher risk.

    Now why would those circumstances lead to private vice engendering public virtue?

    They just wouldn’t. The net result is simply lower investment, and reinvestment rates.

  212. Tel

    They are too stupid to even think as clearly as Krugman considering all angles. They just forget that investors aim to increase their wealth. If they wanted to do capital appreciation, they could do it on their own and Ricardian equivalence means a 40% exit tax is still a 40% exit tax.

    It makes sense if they expect to be able to wangle an exit under some future (more friendly) government. Godwin knows who used this strategy to encourage internal business reinvestment in the past, but hopefully we all learned something and won’t repeat the mistakes of our fathers.

  213. .

    Tel

    I’m not saying firms won’t do so to preserve firm wealth over the short run if they see a lower exit price in the form of taxation, even if the type of taxation simply changes.

    The longer a project, the riskier it is by definition. Reinvestment is available under any tax regime, even a zero rated one, that doesn’t make reinvestment illegal.

    Basically, Krugman is right, because a higher tax rate really offers firms nothing. They are expected to increase social utility for more risk and no reward – even implicitly a lower reward.

    he and I are talking about the general case, for new and old firms, and the aggregate result.

  214. JC

    Grey does sorta remind me of JC’s carbon slave …what was his name?

    Metromick. Their a warrant for his immediate arrest as an escaped carbon slave.

  215. Grey

    SQUIRMING? WHAT FUCKING SQUIRMING? I refer to a graph and you quote a fucking table.

    You mean this graph…..Figure 4?
    http://img543.imageshack.us/img543/3779/tempnk.jpg

    So remind me again, what does it show the result for the Reagan tax cuts of 1981?

  216. Krugman is right about the wage/salary earner but as far as anyone else they will just invest in a lower tax rate country and not pay tax until repatriated. Based on some curves I have seen 30% will return the highest income to the state. This was not taken in isolation but company tax rates around the world.

  217. Tel

    Reagan grew GDP, cut unemployment, increased labour force participation, real wages grew and inflation fell. Dividends and asset appreciation grew.

    Yes, all of which was a boon for the state governments, and I think real-estate taxes picked up as well (based on asset prices or something). Best of all, the states didn’t need to sacrifice much in exchange for that, because Regan did it for them.

    http://www.heritage.org/research/reports/2004/06/the-laffer-curve-past-present-and-future

    If you scroll down to “A Look at the Regan Tax Cut” you see it makes a big difference to the revenue picture when State and Local government is included… and he turned stagflation into growth.

    Mind you, anyone can feel rich with a credit card. The Dubbya government was the worst when it comes to fiscal irresponsibility, but I won’t blame that on Regan.

  218. .

    Krugman is right about the wage/salary earner but as far as anyone else they will just invest in a lower tax rate country and not pay tax until repatriated.

    That’s precisely the point, Kelly.

  219. .

    Tel

    Excellent find.

    http://www.heritage.org/~/media/Images/Reports/2004/bg1765/figure9.ashx

    Dickweed is banging on about initial forecast revenue losses.

  220. Grey

    You were the one that specifically pointed out the graph.

    BTW if you read the text:

    The effect of most tax bills on GDP is uncertain, but probably generally small

    Treasury doesn’t believe in voodoo economics either. Hardly surprising, they of all people are going to know that tax receipts drop when you cut taxes (amazing, but true).

  221. .

    The effect of most tax bills on GDP is uncertain, but probably generally small

    Yes, because they cut the rates by generally small amounts.

    Treasury doesn’t believe in voodoo economics either.

    Which is why they believe cutting tax rates from 50% to 28% and cutting loopholes is productivity enhancing.

    You were the one that specifically pointed out the graph.

    Dickweed. Yet you refer to a table, which doesn’t correlate to the graph in any way. Net effects, anything. Bupkiss.

  222. Grey

    Dickweed. Yet you refer to a table, which doesn’t correlate to the graph in any way. Net effects, anything. Bupkiss.

    A. I didn’t refer to a table
    B. Table two – which I didn’t refer to – actually correlates to Figure 4

    15 words and you managed to be spectacularly wrong twice.

    Oh wonderful, have you located the bar on the graph for the Economic Recovery Tax Act of 1981 yet?

    The bar on the graph of figure 4. The figure and may I quote your very words:

    Figure four shows that Reagan cut taxes and increased revenue.

    Shut up you clown.

    Seriously, why not just admit you made a mistake?

  223. Alice

    JC

    Tel proposed this for you

    May I propose a rule whereby abusive language is allowed but repeats are frowned upon? I’d like to encourage greater depth of colour in the put-downs.

    JC proposed I “go buy a bottle of gin” and “stay out of it” (JCs meanness to Davef last night).

    Then JC you ask me “you do drink gin in the morning dont you?”

    Listen if anyone should feel pissed off its me. You and some of your mates have me drinking
    “gin, creme de menthe, sherry, fruity lexia, whiskey and god knows what else.”

    I dont like any of those and I dont like spirits and I hate ALL reds and I hate beer and cider and cocktails and most of it tastes like garbage but I reckon you had had something last night because you are dreaming about yours and Dots monumental victory over Braggs.

    Dutch courage JC?

    re your comment

    I dont drink anything in the mornings, at midday, in the afternoons and when and what I drink is none of your damn business either.

    Got that? (and you can tell it to your mates).

  224. wreckage

    I guess if Grey turned out to be right about the relation of one table to one graph, that would prove that he was right about everything, including envy not being envy unless it makes you angry.

  225. .

    Yes, Grey proved that a table that has nothing to do with a graph I mentioned had something to do with something else.

    Nor is the fact I explained what it all means, and then showed further analysis by the heritage foundation, mean anything to dickweed.

    Therefore, the Government should confiscate all income and build a really, really big NBN. it would help Equity!.

    Grey is a congenitally brain damaged fuckwit.

  226. wreckage

    Also, one with serious comprehension issues.

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