At his blog at the NYT, Democrat shill Paul Krugman graphically displays his anti-Constitution bona fides while discussing some paper (this is the link Krugman provides) that suggests the optimal federal income tax rates for the highest earners should be 70% (this is how Krugman describes the paper; I haven't read the document, so this post is not a critique of that paper). We all know how dishonest Krugman can be. But as far as I'm concerned, he really takes the cake here.
The shill provides three arguments he thinks the "right side of the room" would use to counter such a tax rate. I'm going to hit these in what I would consider the reverse order of importance.
"They’ll go Galt!" [emphasis mine]:
This amounts to saying that D&S’s estimate of the “behavioral elasticity” is too low. Maybe, but they’re pretty careful about that, and your gut isn’t better than their econometrics.Wanna bet? John McCormack of The Weekly Standard posted how GE sent in a 57,000-page tax return to the IRS to avoid paying even a buck in taxes for 2010. Granted, the GE story is about a corporation's tax return and doesn't deal with individual tax returns. For that, we have today's Bloomberg piece, "Buffett-Ducking Billionaires Avoid Reporting Cash Gains to IRS." My gut tells me "behavioral elasticity" will beat "econometrics" any day, since there isn't any way Krugman could possibly figure out all the angles the wealthy and their host of tax accountants and tax attorneys, along with many of the rest of us who aren't all that wealthy, will find. Krugman is living in the past while forgetting two things: 1) that when there was a 70% tax rate (and higher) for the highest income earners, those earners figured out how to pay a lot less than 70%; 2) the government could get away with rates that high back in those days because just about every other country was recovering from the effects of World War II.
"You’ll kill job creation!":
Right now the official rhetoric of the right, and a fair number of people who consider themselves centrist, is that high-income individuals are “job creators” who must be cherished for the good they do.First off, I question any textbook on economics Krugman would promote. Second, Krugman avoids talking about job creators and the reasons why they create jobs. It has nothing to do with GDP. But what would one expect of a government-centric hack trying to convince the country that we need to be reliving the Great Depression years of FDR.
Yet textbook economics says that in a competitive economy, the contribution any individual (or for that matter any factor of production) makes to the economy at the margin is what that individual earns — period. What a worker contributes to GDP with an additional hour of work is that worker’s hourly wage, whether that hourly wage is $6 or $60,000 an hour.
This is what set me off on Krugman for supporting a 70% rate:
Theft! Tyranny! OK, I hear you. This can’t be argued on rational grounds; I think there are a lot more important moral issues in the world than defending the right of the rich to keep their money, but whatever.I agree that I couldn't argue this with Krugman on rational grounds since he is the one who is completely irrational; in other words, he's projecting. In support of what I wrote here, we see Krugman inventing a new morality where theft is considered good and is encouraged. Worse, he encourages the violation of part of the 10th Commandment in wanting people to covet that which is their neighbor's. And lastly, he wants his readers to believe the equal protection and the personal property rights of certain people shouldn't exist.
It's easy to dismiss a Democratic hack like Krugman. Unfortunately, there are people in power who read him and believe in the same things as he does, that the federal government's taxation powers exceed our individual rights guaranteed by the Constitution and that covetousness is a virtue.
Cross-posted at RedState.