It's not secular stagnation; it's financialization.
April 18, 2016 1:49 AM Subscribe
Elizabeth Warren has a great idea for making Tax Day less painful - "She's taking on TurboTax and other predatory companies."
But it's not just tax preparers who're fleecing America:
On Wednesday, Sen. Elizabeth Warren (D-MA) introduced a bill that would make doing taxes vastly easier for Americans — and would strongly push back against the tax prep industry's attempts to keep taxes difficult.A weird coalition wants to keep tax preparation painful and difficult - "In Sweden, the four-page tax form comes in the mail already filled out. In 15 minutes we are done." (via)
The Tax Filing Simplification Act of 2016 would order the IRS to create a free online tax preparation and filing service comparable to TurboTax or other commercial programs. Moreover, it bans the agency from working with the tax prep companies, as it's been doing for years.
But it's not just tax preparers who're fleecing America:
- Financial cycles, labour misallocation, and economic stagnation - "What if what some see as a rather disappointing pre-crisis US growth performance despite a strong financial boom was actually disappointing, in part, precisely because of that boom? What if the protracted post-crisis weakness reflects in no small measure the difficulties in correcting the resource misallocations that accumulated during the previous financial boom and emerged once a financial crisis subsequently broke out?" (via)
- Kenneth Arrow: There Is Regulatory Capture, But It Is By No Means Complete - "The fact that the financial industry is responsible for something like 30 percent of all profits seems rather remarkable. I am startled by the size of the financial industry and what it means. I can't believe this is really needed for the allocation of resources. A lot of it is going to be rent-seeking. It creates a diversion of resources, especially human capital, and not only does it create problems for the legitimacy of income distribution, but that also means resources diverted for this purpose [rent-seeking] can't be used elsewhere."
- The Economist: Profits are too high - "Profits have risen in most rich countries over the past ten years but the increase has been biggest for American firms. Coupled with an increasing concentration of ownership, this means the fruits of economic growth are being hoarded. This is probably part of the reason that two-thirds of Americans, including a majority of Republicans, have come to believe that the economy 'unfairly favours powerful interests', according to polling by Pew."
- Larry Summers: Corporate profits are near record highs; here's why that's a problem - "The issue of growing market power deserves increased attention from economists and especially from macroeconomists." (via)
- Why Elites Want More Competition for Everyone Except Themselves - "The real cause of elite inequality is the lack of open access and market competition in elite investment and labor markets. To bring the elite down to size, we need to make them compete."
- The White House: How More Competition Gets You a Better Deal - "President [Obama] is launching a new initiative to stoke competition across our economy, so that no corporation can unfairly squeeze their competitors, their workers, or their customers at everyone's expense." (via)
- Robert H. Frank: Why Libertarians Should Support Many Forms of Government Intervention - "If both the employer and the worker find the terms of a proposed labor contract attractive, and both are well informed, how does the government make either party better off by requiring greater safety than they want? My response is that the case for regulation doesn't rest on any claim that parties to the contract are incompetent or ill-informed. Rather, the problem is that their contract imposes harm on third parties that is virtually impossible for them to avoid on their own... the most comprehensive measure of a person's autonomy is ultimately the extent to which she is able to do the things she wants to do. If others act in ways that cause her substantial harm, they reduce her autonomy."
- Economists Are Warming to Government Intervention - "Virtually all economists agree with the principle that externalities should be taxed and tend to see externality taxes (or 'Pigovian' taxes after the economist Arthur Pigou) as quite natural."
- Soaking the Rich Is a Perfectly Reasonable Idea - "Researchers Dirk Krueger and Fabian Kindermann, for instance, have suggested that the government could maximize its revenue if it slapped a 98 percent top marginal rate on the highest 1 percent of earners (right now, we're at a measly 39.6 percent). Thomas Piketty, Emmanuel Saez, and Stefanie Stantcheva argue the golden number is probably between 57 and 83 percent. Sanders, by comparison, envisions a top income tax rate of a mere 54.2 percent. Clinton? Just 46.1 percent. The nonpartisan Tax Policy Center, which uses pretty mainstream assumptions about how workers and investors change their behavior when taxes rise, thinks both will raise plenty of money."
- The Global Architecture of Wealth Extraction - "If we were to tax a mere 10% of the money hoarded away in tax havens, we would have at least $2,000,000,000,000 that could be used to fund (1) universal basic income; (2) universal healthcare for more than 7 billion people; (3) free public and university education for everyone on Earth; (4) fund basic scientific research for all major problems humanity must confront; and (5) make the transition to ecologically-based energy systems and urban design that staves off the potential for collapse of our highly unsustainable civilization."
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