Meaning of a 70% Income Tax Rate

Several Democrats have proposed a top income tax rate of 70% on incomes over $10 million.

Samuel Hammond argues that it is NOT about the optimal tax rate, soaking the rich, the rate in the past. It is a symbolic attack on the legitimacy of wealth accumulation itself.

Its goal is not about tax-fairness or raising revenue efficiently (which it fails at on both counts). Its goal is to popularize a strict egalitarian view of wealth accumulation as prima facie evidence of personal corruption. If that view catches on, it would represent a major setback in the public’s understanding of the differences, both normative and economic, between productively acquired wealth and rent seeking.

The Democratic Socialist’s economic model is Scandinavia. But we in the U.S. have our own economic model, and culture based on our own history. We are more individualist.

With the countercultural rebellions of the 1960s and 70s, followed by the Reagan Revolution of the 1980s, the left and right eventually reverted back to America’s historically more individualistic ethos of self-expression and entrepreneurship.

In Scandinavia, the dominant conformist zeitgeist is called the Law of Jante, a reference to a fictional Danish town that enforces being ordinary in every possible way. “Tall poppy syndrome” is perhaps the closest concept in American vernacular, although it doesn’t do the oppressiveness of Scandinavia’s egalitarian milieu justice. Excessive ambition is frowned upon while non-conformists are treated with suspicion, as illustrated by the expression, “You are not to think you’re better than us.”

The cost of this strict egalitarianism. In Scandinavia, the rich stay rich and everybody else is stuck. They’re economic opportunity is a snapshot frozen in time. Nobody can rise up because they are taxed too much to save anything that can be invested.

In short, Ocasio-Cortez’s focus on soaking the small number of Americans who make more than $10 million in a year has earned her socialist bona fides while ironically sparing — if not threatening to entrench — the closest thing America has an to emerging nobility. That’s not radical. Far from it. It’s conformism to the most mundane progressive politics imaginable.

We are Americans. They are trying to force 300+ million people to behave the way they deem worthy. No. Move to your utopia. Leave us alone. These people are tyrants and must be stopped.

Hammond’s piece here.

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How You Spend Your Money Is Your Business

Don Boudreaux to a reader:

Mr. Grant:

You ask how I “dare infer” that my “self-centered desire” to trade with foreigners as I choose should “outweigh the American people’s verdict to have our President conduct our trade in ways which he concludes advances our national interest.”

I ask how you dare infer that Donald Trump’s – or Chuck Schumer’s, or Lindsey Graham’s, or Bernie Sanders’s, or Peter Navarro’s, or Sherrod Brown’s, or Steve Bannon’s, or you-name-the-arrogant-brute’s – self-interested desire to prevent me from trading with foreigners should outweigh my own verdict, when spending my own money, to conduct my trade in ways that I conclude will advance my own interest.

How I spend my money is none of Trump’s – or American voters’ – business. Nor is it any of your business. Also none of Trump’s or American-voters’ business is how you spend your money. Nor is it any of mine.

To the extent that we embrace your and Trump’s belief that government officials have a right to superintend how each individual spends his or her own money, we treat our rights as garbage and become hapless beasts of burden for those whom we gullibly permit to shove their bridles into our mouths. I’ll have none of it.

My sentiments exactly.

Castro’s Revolution on Its 60th Anniversary

Vincent Geloso examine’s the results.

I’ll quote one observation about Cuba’s supposed superior health care.

However, many researchers have pointed out important discrepancies in the data regarding infant mortality. They have showed that doctors often reclassified early neonatal deaths (before the 7th day of life) as late fetal deaths (before birth). Because late fetal deaths are not included in infant mortality calculations while early neonatal deaths are, this reclassification artificially reduces the infant mortality rate. . . .

This type of reclassification also has an effect on measured life expectancy because late fetal deaths are not counted in the life tables that are used to calculate life expectancy at birth. In research recently published with Gilbert Berdine and Benjamin Powell in Health Policy & Planning, I show that, in Cuba, this practice has reduced life expectancy at birth for men by somewhere between 0.22 and 0.55 years.

Bureaucratic manipulation of statistical data skews the results. Clever.

China—Americans’ Economic Bugaboo du Jour

Bob Higgs:

I am old enough to remember when almost everyone believed that the Russians were, as Khrushchev put it, going to “bury” us. Even leading economists such as Paul Samuelson were taken in by such nonsense. Of course, no such burial occurred, because just producing vast quantities of concrete, steel, and H-bombs is no evidence that anything of genuine value is being produced. Later Japan became the Godzilla that was going to eat the U.S. and European economies with its bureucratic setup for picking and subsidizing “winners.” Before long that setup too collapsed in a heap and gave way to perpetual stagnation. Now almost everyone quakes in his boots while beholding the mighty Chinese economy. Again the hysteria has no firm foundation. An economy shaped and guided by government bureaucrats and Communist bigwigs by means of tariffs, subsidies, state-controlled credit, and state-owned industries cannot be a real growth miracle for long. This too shall pass.

And when it does Americans will learn nothing from their most recent mistake. If people really understood sound economics, they would not continue to make this same mistake again and again.

 

Yes, that’s right. First it was the Russians, then the Japanese, now China. Russia and Japan are faltered under the weight of central planning. China is doing that, too.

Amazon Executives Face NYC Protesters and Legislators

“We have a crumbling subway system, record homelessness, public housing that is in crisis, overcrowded schools, sick people without health insurance and an escalating affordable crisis,” said City Council Speaker Corey Johnson, a Democrat.

All those local issues, in one of the highest taxing and spending states in the U.S. Why is that so? And a proud progressive city and state to boot:

State Assemblyman Ron Kim, a Queens Democrat, told protesters rallying on the steps of City Hall before the hearing, ” Any politician in our progressive city and our state who’s willing to had $3 billion to Amazon — that should be a career ender right there.”

It would be funny if it weren’t so sad.

Whole thing here.

Farm Bill Socialism in Senate

 

Republicans have criticized the socialism of Democrats such as Rep. Alexandria Ocasio-Cortez, but they should reflect on their own party’s socialist vote in the Senate yesterday. The upper chamber voted 87-13 for the bloated monstrosity known as the farm bill, which funds farm subsidies and food stamps. Republicans in the Senate voted in favor 38-13.

I’m less worried about the food stamp wealth distribution. After all, it is part of a safety net in a market economy. Its the corporate and industry control that is more worrisome: ” 807 pages of legalese laying out excruciating details on crop prices, acres, yields”. It also pays wealthy landowners who live in a city but qualify for subsidies because they finagle the rules that say they are farmers.

Some Republican hypocrites listed. But it is a bipartisan freak show.