« Top Headline Comments 9-23-10 | Main | Today is the Official End of Summer... »
September 23, 2010

Atlas and the Tax Cuts

300 economists signed a letter yesterday - the kind of letter that means Paul Krugman won't be inviting them to any of his parties:

“We, the undersigned economists, write in support of extending current tax rates on income and investments in order to prevent a devastating blow to America’s fragile economic recovery,” the letter reads. “Robust economic growth is best served by a tax code that levies low and predictable rates. The promise of a tax increase in January 2011 would create significant economic distortions as individuals and businesses conserve capital or stave off hiring.”
And of course they shouldn't be holding their breath for an invite to one of those all-too-common shindigs at the White House:
The letter was meant, in part, to counter a statement President Obama made earlier this month during a press conference. He said economists believe extending the Bush-era tax cuts for wealthy Americans “is probably the worst way to stimulate the economy.”

I was discussing this with Andy over at The Snausages last night - he was of the addlepated impression that letting the Bush tax cuts expire wouldn't have that large an impact, especially if it was restricted to the $250K+ set. I disagree, for the following reason:

If you look at the ratio of private working stiffs to everybody else, you can get an idea of the burden on the private sector. That is, you can tell how many mouths each private employee has to feed, be they government employees, the unemployed, kids, or other people who don't work. Here's how that has looked over the past few years (the population divisor does not include kids under 16, so it's high):


That's Atlas groaning right there - more than a 10% increase in the burden on each private employee. Naturally that has been unsustainable, which is why we've borrowed to make up the shortfall.

Now imagine increasing the tax rate on the $250K+ folk by 5%. They make about a quarter of the country's income, so you're basically taking another 1.25% out of the private economy and running it through the government at an economic multiplier that's less than 1. That just increases that already-unsustainable burden on the private sector.

The bottom line is that until we recover to ratios in the neighborhood of 0.5, it's not a great time to be pulling more money out of private hands. But as we already know, for the Obama crowd it's not a matter of a healthy economy, it's a matter of social justice. Which means that it's fine if the economy tanks, as long as we all tank together.

digg this
posted by Geoff at 09:39 AM

| Access Comments

Recent Comments
Nevergiveup: "In all seriousness anyone who goes to boot camp- e ..."

SSBN 656 (G): "Same with one of mine. They had to break into four ..."

blaster: "Let's say that Trump and Putin in their meeting sa ..."

platypus, gg channel: "For a non content thread we're already almost ther ..."

willow: " kristols being traitorish s a yawn, however jona ..."

BEN ROTHSLINBURGER taking a break from "it's funny" meme: ">>>I bet they thought that was cuter than a basket ..."

Lancelot Link Secret Agent Chimp : "Anyone watch that Las Vegas police chase / shootou ..."

NaCly Dog[/i][/b][/s]: "Warai-otoko. The US Military participated in t ..."

JackStraw: ">>I know how you felt..... they pulled all 4 of mi ..."

zombie Tito: "96 Billy only wants them parading through Podgoric ..."

SSBN 656 (G): "A lame pun about drum majors and military ranks.Po ..."

SMH: "436 Change front forward on the first destroyer! C ..."

Recent Entries

Polls! Polls! Polls!
Frequently Asked Questions
The (Almost) Complete Paul Anka Integrity Kick
Top Top Tens
Greatest Hitjobs

The Ace of Spades HQ Sex-for-Money Skankathon
A D&D Guide to the Democratic Candidates
Margaret Cho: Just Not Funny
More Margaret Cho Abuse
Margaret Cho: Still Not Funny
Iraqi Prisoner Claims He Was Raped... By Woman
Wonkette Announces "Morning Zoo" Format
John Kerry's "Plan" Causes Surrender of Moqtada al-Sadr's Militia
World Muslim Leaders Apologize for Nick Berg's Beheading
Michael Moore Goes on Lunchtime Manhattan Death-Spree
Milestone: Oliver Willis Posts 400th "Fake News Article" Referencing Britney Spears
Liberal Economists Rue a "New Decade of Greed"
Artificial Insouciance: Maureen Dowd's Word Processor Revolts Against Her Numbing Imbecility
Intelligence Officials Eye Blogs for Tips
They Done Found Us Out, Cletus: Intrepid Internet Detective Figures Out Our Master Plan
Shock: Josh Marshall Almost Mentions Sarin Discovery in Iraq
Leather-Clad Biker Freaks Terrorize Australian Town
When Clinton Was President, Torture Was Cool
What Wonkette Means When She Explains What Tina Brown Means
Wonkette's Stand-Up Act
Wankette HQ Gay-Rumors Du Jour
Here's What's Bugging Me: Goose and Slider
My Own Micah Wright Style Confession of Dishonesty
Outraged "Conservatives" React to the FMA
An On-Line Impression of Dennis Miller Having Sex with a Kodiak Bear
The Story the Rightwing Media Refuses to Report!
Our Lunch with David "Glengarry Glen Ross" Mamet
The House of Love: Paul Krugman
A Michael Moore Mystery (TM)
The Dowd-O-Matic!
Liberal Consistency and Other Myths
Kepler's Laws of Liberal Media Bias
John Kerry-- The Splunge! Candidate
"Divisive" Politics & "Attacks on Patriotism" (very long)
The Donkey ("The Raven" parody)
Powered by
Movable Type 2.64