Free Markets, Free People

Daily Archives: November 28, 2011


Krugman has it all figured out: Tax the Rich

Yes, Paul Krugman has a novel idea that no one has previously thought of … we can get out of this mess we’ve spent ourselves into by taxing the rich.

And by the way, income inequality now makes that both feasible and acceptable:

About those high incomes: In my last column I suggested that the very rich, who have had huge income gains over the last 30 years, should pay more in taxes. I got many responses from readers, with a common theme being that this was silly, that even confiscatory taxes on the wealthy couldn’t possibly raise enough money to matter.

Folks, you’re living in the past. Once upon a time America was a middle-class nation, in which the super-elite’s income was no big deal. But that was another country.

The I.R.S. reports that in 2007, that is, before the economic crisis, the top 0.1 percent of taxpayers — roughly speaking, people with annual incomes over $2 million — had a combined income of more than a trillion dollars. That’s a lot of money, and it wouldn’t be hard to devise taxes that would raise a significant amount of revenue from those super-high-income individuals.

Because you know, “super-high-income individuals” don’t deserve to keep the money they earned, because, well, we’ve gotten ourselves in this awful mess and we need someone to bail us out.

And they have a lot of money, by gosh.  A lot of money.  So “it wouldn’t be hard to devise taxes” that would take most of it on the marginal side.  Because again, we should have first claim when we get ourselves in trouble.  Besides, they have more than enough money and they should pay their “fair share”.

A couple of reminders.  Despite what Krugman says, taxing the top 0.1% isn’t going to make a significant difference.  And even if it did, it would only make that sort of difference once.  The next year, that money would be much less available.  Which would probably mean what?

Well “rich” would have to be redefined, wouldn’t it?   Maybe then it would be the top 1%, because we all know they have more money than they need and they should pay their fair share, right?

As a reminder, the Adjusted Gross Income necessary to be considered a one-percenter is a ‘rich’ $343,927.  And this particular percentage of tax payers are indeed shirking their fair share.  After all, they only pay 36.73% of all income tax collected now.   Surely we can kick that up to, oh I don’t know, at least 50%.  And, of course “we” can, certainly.   For a short time, that will indeed bring in more revenue.  But, again, once the marginal rate goes up those being stuck with the tax bill will go to work finding ways to minimize that hit.   And, they will.

Which means those top 5% suddenly become vulnerable, etc.

A short version of the Krugman solution can be found working so well in Europe right now.  And E21 does a good job of reminding us of Krugman’s unadulterated enthusiasm for the social welfare states to be found there.  E21 also does a great job of eviscerating Krugman’s arguments concerning Europe’s problems:

Paul Krugman insists that the European debt crisis has nothing to do with excessive government spending.  The problem, to him, is a failed monetary experiment that deprives nations like Greece and Italy of the ability to print money to inflate away excessive debts.  The need to create an alternative understanding for the origins of the debt crisis is only natural given the extent to which the current crisis has tarnished the statist ideology that Krugman generally follows.  But his basic claims are nonsensical, as is Krugman’s citation of Sweden and Germany as economic role models.  While these economies have performed relatively well through the crisis, it was because they abandoned Krugman’s preferred economics and moved in a more market-oriented direction long-ago.

He was wrong about Europe and he’s wrong about taxes.  He’s become an economic joke but just doesn’t know it yet.  He’s a one-trick pony who, much like the global warming alarmists, ignores the fact that what he continues to claim is viable and necessary is constantly and consistently being trashed by reality.

The only good news is he remains a source of entertainment.   It’s sort of like a game.  You wonder how long he can go before reality actually grabs him by the scruff of the neck and makes him recognize the error of his ways (my bet?  Never happens).   And, as a bit of side fun, you wonder how long the NY Times will continue to let Krugman push his reality challenged agenda forward before they finally (and, of course “reluctantly”) can him (see first bet – they haven’t a clue).

~McQ

Twitter: @McQandO


Economic Statistics for 28 Nov 11

It’s a heavy week for economic statistics, culminating in the Employment Situation on Friday, but we start the week off light:

New home sales rose 1.3% in October. That’s a solid gain, but the total of 307,000 was a bit below expectations.

The Dallas Fed general business activity index rose to 2.3 from -14.4., its first positive reading in six months.

~
Dale Franks
Google+ Profile
Twitter Feed


It is “global warming week” and the press will be full of it

Why?  Because there’s a UN meeting beginning in Durbin, South Africa on “climate change” and the propaganda will be freely flowing.

For instance:

A new round of United Nations climate talks is getting under way in Durban, South Africa, Monday. And domestic struggles here in the United States are hampering the global talks.

The United States is second only to China in emitting gases that cause global warming. Despite a presidential pledge to reduce emissions two years ago, we’re spewing more carbon dioxide than ever into the atmosphere.

That’s putting a crimp on the 20-year-long struggle to develop a meaningful climate treaty.

Really?  That’s what’s putting a crimp on it?  Or is the unquestioned acceptance of  the premise “emitting gases”  causes “global warming” perhaps the problem when it appears the “science” is falling apart?

What is interesting to me is to watch those who unquestionably accept this premise ignore the profound problems the “science” that supports this nonsense has shown.

Christopher  Booker does a good job of distilling the problem, here speaking of the UK government:

To grasp the almost suicidal state of unreality our Government has been driven into by the obsession with global warming, it is necessary to put together the two sides to an overall picture – each vividly highlighted by events of recent days.

On one hand there is the utterly lamentable state of the science which underpins it all, illuminated yet again by “Climategate 2.0”, the latest release of emails between the leading scientists who for years have been at the heart of the warming scare (which I return to below). On the other hand, we see the damage done by the political consequences of this scare, which will directly impinge, in various ways, on all our lives.

Like driving up energy costs to a point that energy poverty will be a common problem.  Booker has another nice body slam to the “premise” later on in his article:

While our Government remains trapped in its green dreamworld, similar horror stories pile up on every side, from that UBS report on the astronomically costly fiasco of the EU’s carbon-trading scheme, to our own Government’s “carbon floor price”, in effect a tax on CO2 emissions rising yearly from 2013. This alone will eventually be enough to double the cost of our electricity, and drive a further swathe of what remains of UK industry abroad, because we are the only country in the world to have devised something so idiotic.

All this madness ultimately rests on a blind faith in the threat of man-made global warming, which no one has done more to promote than the scientists whose private emails were again last week leaked onto the internet.

It is still not generally appreciated that the significance of these Climategate emails is that their authors, such as Michael Mann, are no ordinary scientists: they are a little group of fanatical insiders who have, for years, done more than anyone else to drive the warming scare, through their influence at the heart of the UN’s Intergovernmental Panel on Climate Change. And what is most striking about the picture that emerges from these emails is just how questionable the work of these men appears.

That’s entirely true if you actually read through the released emails.  What you read isn’t science, it is “scientists” tailoring their “science” to fit a political agenda in order to keep the grant gravy train rolling.  The deniers, in this particular horror show, are the true believers who have, on faith, accepted the “premise” and refuse to question it or examine the evidence which argues strongly against it.

To be clear, the whole debate revolves around “climate sensitivity” to CO2.  Those on the side of man-made global warming claim the environment is highly sensitive to CO2.  The so-called “deniers” claim it isn’t at all.  And for those who’ve followed the debate, the real science seems to support the so-called “deniers”.

The climate may be less sensitive to carbon dioxide than we thought – and temperature rises this century could be smaller than expected. That’s the surprise result of a new analysis of the last ice age. However, the finding comes from considering just one climate model, and unless it can be replicated using other models, researchers are dubious that it is genuine.

As more greenhouse gases enter the atmosphere, more heat is trapped and temperatures go up – but by how much? The best estimates say that if the amount of carbon dioxide in the atmosphere doubles, temperatures will rise by 3 °C. This is the "climate sensitivity".

But the 3 °C figure is only an estimate. In 2007, the Intergovernmental Panel on Climate Change (IPCC) said the climate sensitivity could be anywhere between 2 and 4.5 °C. That means the temperature rise from a given release of carbon dioxide is still uncertain.

But you wouldn’t know that by listening to the alarmists (and much of the press) who continue to claim the science is settled.  And that’s in the face of this:

The global output of heat-trapping carbon dioxide jumped by the biggest amount on record, the U.S.Department of Energy calculated, a sign of how feeble the world’s efforts are at slowing man-made global warming.

The new figures for 2010 mean that levels of greenhouse gases are higher than the worst case scenario outlined by climate experts just four years ago.

Yet:

… Prof Curry said, the project’s research data show there has been no increase in world temperatures since the end of the Nineties – a fact confirmed by a new analysis that The Mail on Sunday has obtained.

‘There is no scientific basis for saying that warming hasn’t stopped,’ she said. ‘To say that there is detracts from the credibility of the data, which is very unfortunate.’

[…]

… [S]he added, in the wake of the unexpected global warming standstill, many climate scientists who had previously rejected sceptics’ arguments were now taking them much more seriously.

They were finally addressing questions such as the influence of clouds, natural temperature cycles and solar radiation – as they should have done, she said, a long time ago.

But the true believers gathering in Durbin SA?  Still reject the fact that the so-called “science” of global warming is under fierce and sustained attack and is being found to be increasingly wanting in both substance and fact.

And I don’t know about you but it seems incredible to me that, as Prof. Curry notes, scientists are “finally addressing” the influence of “clouds, natural temperature cycles and solar radiation”. 

Finally!?  How in the world could “science” not have included those originally?  How could they have somehow been factored out?

That’s actually an easy question to answer.

Because including them wouldn’t have given the “scientists” in question the results necessary to support the “premise” cooked up by those pushing the man-made global warming agenda.  And that, of course, meant an end to the grant money of multi billions of dollars.

Meanwhile in Durbin this week, the real deniers are going to be busily trying to trade away your ability to purchase cheap and plentiful energy through various schemes which will advance their agenda and put the rest of humanity in an unrecoverable energy deficit.

Delegates at the conference will also be hammering out the details of a plan to administer the Green Climate Fund, money that is to help poor countries deal with climate change.

The fund is expected to grow over the next eight years to eventually distribute about $100 billion a year. However, it is still unclear where all of that money will come from and how it will be distributed.

In addition to the usual international development funds from the West, proposals include a carbon surcharge on international shipping and on air tickets, as well as a levy on international financial transactions.

This is what junk science tied to a political agenda brings.  And, as usual, you’ll be levied to pay the bill they agree on with your money and your way of life.

~McQ

Twitter: @McQandO


Kimberly Webb Joyner RIP

The wife of one of our own, James Joyner of Outside the Beltway blog, passed away over the weekend.  Her death was obviously untimely as she was only 41.  James started OTB about the same time QandO started and has been a friend to this blog and many others over the years. 

We here at QandO want to express our most profound sympathies and condolences to James and his family.  Kimberly leaves behind two young daughters.   Please include the family in your prayers.

~McQ

Twitter: @McQandO