We already have a flat tax?
February 26, 2007 5:41 PM   Subscribe

US TaxFilter: Your real tax rate: 40%.
"In a study for the National Bureau of Economic Research, Boston University economists Laurence J. Kotlikoff and David Rapson have found that our all-in marginal tax rate is 40%, give or take a bit. Yes, you read that right: 40%." The table at the end is telling.
posted by knave (88 comments total) 7 users marked this as a favorite
 
The original paper is here.
posted by Burger-Eating Invasion Monkey at 5:47 PM on February 26, 2007


Ah! I was about to ask B-E. I. M., thanks.
posted by JHarris at 5:49 PM on February 26, 2007 [1 favorite]


Lets say I make $500k a year, and I have a $45 million dollars in investments, in the railroad company CSX. I pay the federal government 42%, $210k. Meanwhile CSX, with a 17 billion dollar market cap gets a corporate wellfair check for $164 million.

What's my marginal tax rate?
posted by delmoi at 5:51 PM on February 26, 2007 [5 favorites]


I've never understood all the American griping about "oh, in EUROPE, their taxes are so HIGH!"

Whereas, in reality, the tax rates are quite comparable.

And in Europe - unlike America - citizens actually GET something from their taxes: health care, education, parental leave, etc.

Here, people think their taxes are too high, and yet don't bat an eye at mortgaging the house to send a kid to college. Or filing for bankruptcy if somebody gets sick.

But at least "our taxes are low...".
posted by AsYouKnow Bob at 5:51 PM on February 26, 2007 [6 favorites]


ARGH. Won't let me download because I "have no subscription."

To hell with them. Why should I believe a crazy-ass assertion if I have to pay moolah to hear their reasoning? Fuck that.
posted by JHarris at 5:53 PM on February 26, 2007


I've never understood the griping about taxes, either. I don't like paying them, but I also don't like exercising.

The right hates the idea of "handing money" to "deadbeats."

The left hates the idea of "handing money" to "big business."

In the end, both sides make token tax cuts to pander to their constituents, who end up paying the same overall tax, regardless.
posted by maxwelton at 5:55 PM on February 26, 2007


The table at the end, if translated into a graph, would look totally inconclusive. Way too much variation for a trend line, flat or not. And the dip in numbers around $50,000 looks significant. Especially since the 30 y.o. age group does so much better than the 45 & 60 y.o., even though the older people in that income range are more likely to be homeowners (America's favorite tax shelter). I call bullshit on these economist-created statistics.
posted by wendell at 5:55 PM on February 26, 2007


Makes fairtax.org sound even better.
posted by Frank Grimes at 5:57 PM on February 26, 2007 [1 favorite]


Just 40%? That would be sweet.
posted by caddis at 6:03 PM on February 26, 2007


Plus, who knows if this is even true or not.

If I were in charge, I would get rid of personal income tax entirely. Even SS, but I might put in some sort of mandatory savings plan. SS payments would be made from general funds, and tied to wages.

So where would the government make its money? By taxing under performing assets.
posted by delmoi at 6:05 PM on February 26, 2007


Lets say I make $500k a year, and I have a $45 million dollars in investments, in the railroad company CSX. I pay the federal government 42%, $210k. Meanwhile CSX, with a 17 billion dollar market cap gets a corporate wellfair check for $164 million.

Hmm, no one wanted to try my little math problem? Well, the answer is the hypothetical rich me would pay a net tax rate of negative 50% As a part owner of CSX, the government's tax rebate would be twice my personal tax rate.
posted by delmoi at 6:09 PM on February 26, 2007


My accountant told me this last year. When I asked how I could save from my high tax bills (I don't have any office space or inventory, nor an army of employees, so my write-offs are slim), he looked at everything, said he did what he could, and that in the future "just know that 40% of everything you make goes back into taxes, no matter what you do."
posted by mathowie at 6:09 PM on February 26, 2007


... more likely to be homeowners (America's favorite tax shelter).

I'm assuming this study includes property taxes, though, which would offset the tax savings to some degree (depending on a lot of factors). For example, say I paid $10,000 in mortgage interest last year, giving me a break of something like $2500 on my income taxes. At the same time, my town charged me $2000 in property taxes. (All these numbers are completely made up, but realistic.)
posted by knave at 6:11 PM on February 26, 2007


The MSN article refers to not just Federal but also State income taxes and sales taxes. These do vary quite a bit by state and locality. An accurate study (the article does not say) would also factor in property taxes, which also vary greatly by location. Consider also that your sales tax depends on your pattern of consumption, not just on your income.

I'm very skeptical of this "flat tax" premise.
posted by Robert Angelo at 6:17 PM on February 26, 2007


Does the Department of Defense pay taxes? No, because it is a wholly owned subsidiary of the federal government. The people who own CSX own the federal government, why should they pay taxes to themselves?

Has Steve Forbes beamed out from the mothership again? As a 30yr old making less than 20K, I'm pretty sure my 'marginal' tax rate is less than 40% or I'd be even more fucked than I am.
In fact, including the earned income credit my tax rate is negative... just like CSX! (i don't pay much sales tax 'cause mainly I buy food.)
posted by geos at 6:21 PM on February 26, 2007


Meanwhile CSX, with a 17 billion dollar market cap gets a corporate wellfair check for $164 million.

I hate wellfair checks. So, well, not fair.
posted by lalochezia at 6:22 PM on February 26, 2007


There is no need for a bumpy step-progressive income tax. A flat tax beginning at the average income line would do the same (if social security and Medicare were folded in). If everyone paid a marginal rate of ~35% on income beyond the average line it would be both flat and progressive. The political reality is that the wealthy pay for politicians, while the wage earner doesn't understand that they are over-taxed in the critical stages of capital formation and thus prevented from saving and creating opportunities for themselves (expanding the future tax base).

Tax should only be on profit, not losses. It stymies a demand economy to take money from families that would spend it on goods and services (who need to hire accountants just to pay their taxes). The irony is the backwards argument that the wealthy need tax breaks to create businesses, while the poor need low wages as an incentive to work harder: game theory at its worst and it is evident by the rich getting richer and poor getting poorer.

Finally, the smartest thing we could do with our benefits program is to offer healthcare and higher education because it can't be abused like cash is and it increases productivity.
posted by Brian B. at 6:27 PM on February 26, 2007 [2 favorites]


delmoi, I am just curiuos. Why CSX?
posted by repoman at 6:30 PM on February 26, 2007


40%? Sounds about right.
posted by Faint of Butt at 6:32 PM on February 26, 2007


delmoi:

The first rule of corporate welfare club is: you don't talk about corporate welfare club.
posted by pompomtom at 6:38 PM on February 26, 2007


delmoi, I am just curiuos. Why CSX?

I read an article about them getting a huge tax rebate a couple of years ago, I think one year they got the largest tax brake of any corporation. Obviously if you look at a company like Halliburton, an investor would be getting even more back out, but that's harder to calculate. With CSX it was literally a direct cash payout.
posted by delmoi at 6:59 PM on February 26, 2007


Considering that CSX's stock price has done nothing but gone down in the last 2.5 years, that corporate welfare check didn't do a damn thing to your tax burden. If you happen to sell some of your loss-making CSX stock, you can use it to offset your other income. The only way the corporate welfare is going to help you is if they pay it out directly as a dividend (at which you will be taxed 28% or so), or the stock price increases enough that you can recover your losses from the declining stock price.
posted by b1tr0t at 7:10 PM on February 26, 2007


Brian B, an insightful post, although I think that you probably aren't quite drawing the lines right. The poor won't accumulate capital no matter what you do to the tax code; inability to make strategic life choices successfully is why they're poor in the first place (with heart-rending tragic exceptions aside).

The middle class, on the other hand, responds very well to tax (dis)incentives for investment. Rather than tinker with rates, though, I think it would make sense to do it with a 401k-type non-retirement account: any amount invested up to a certain limit would be tax deferred; principal has to remain invested for 20 years but income and gains can come out freely (and taxed) or be reinvested and tax-deferred. Structuring the accounts to permit easy investment in your own small business -- which is effectively illegal for a 401k -- and you're at perfection.
posted by MattD at 7:17 PM on February 26, 2007


geos, I think you may want to reconsider your position, especially when you recall that sales taxes are regressive. You probably spend much closer to 100% of your income on non-durable goods, and thus that's a clean 7% (or so) right off the top. Can't deduct sales tax!
posted by TheNewWazoo at 7:20 PM on February 26, 2007


I've never understood all the American griping about "oh, in EUROPE, their taxes are so HIGH!"

Whereas, in reality, the tax rates are quite comparable.


It is because Americans have drank so much kool-aid and had so much wool pulled over their eyes that not much makes sense any more.

From my observations, I would say that Europeans are simply more democratically engaged, government is held to be more accountable, unions are present on a larger scale, and big business lobbies are not all powerful.

And I know that the article is an MSN money newsquip, but doesn't the following read like it was written 20 years ago?

"Democrats argue that taxes on the rich should be raised because others need the money. This wins votes from the legions of voters who aren't rich.

Republicans argue, with great piety, that high taxes crush incentives and should be reduced, and that only then will the American way see a new dawn."

posted by pwedza at 7:32 PM on February 26, 2007


Brian B.; one of the attractions of the flat tax is its simplicity, and concomitant reduction in costs. You lose much of both of these when you introduce an "untaxed" portion of earnings. The question is then a quantitative trade off between progressivity and complexity / cost between the "flat" tax and a regime with more than two brackets.
posted by ~ at 7:48 PM on February 26, 2007


You want to talk a flat tax, let's have a flat tax on utility, not money.
By the law of diminishing returns (decreasing marginal utility) your first and only dollar is incredibly important, and each subsequent dollar after that slightly less important.
You can check this with a quick observation: If a household makes $10,000 a year, taking even 10% is an enormous burden. There's a big difference between $9k and $10k.
On the other hand, a household that makes $1 million a year isn't even going to notice that 10% in any significant way.
This has to do with the utility (the pleasure or usefulness derived) of money. And you'd have to tax the wealthy a whole lot to even begin to hurt them as much would a tax the poor.
posted by Richard Daly at 7:55 PM on February 26, 2007 [5 favorites]


TheNewWazoo

You probably spend much closer to 100% of your income on non-durable goods, and thus that's a clean 7% (or so) right off the top. Can't deduct sales tax!

my main expenses are food and rent and there is no sales tax on grocery items where I live. bottom line: for the msn.money reader maybe, but the world of under 20K is a totally different beast.


MattD:

The poor won't accumulate capital no matter what you do to the tax code; inability to make strategic life choices successfully is why they're poor in the first place (with heart-rending tragic exceptions aside).

watch out dude, Steve Forbes is gonna swoop down and take you to that big party spaceship in the sky with that kind of talk. three words: George W. Bush. If lack of strategic sense made a man poor...

but that's way too polite.
posted by geos at 8:02 PM on February 26, 2007


The question is then a quantitative trade off between progressivity and complexity / cost between the "flat" tax and a regime with more than two brackets.

The idea that a flat tax is simpler than a progressive tax is just a canard that the conservatives use to argue for lower taxes for the rich. A progressive tax just requires a simple table on a half a sheet of paper. You look up your income, find your tax and send it in. It's not complicated at all.
posted by JackFlash at 8:02 PM on February 26, 2007


JHarris: The article is at the first author's website (71 pages, 500 kb pdf. A steal even at the 5 bucks that NBER wants).
posted by lukemeister at 8:33 PM on February 26, 2007


By the law of diminishing returns (decreasing marginal utility) your first and only dollar is incredibly important, and each subsequent dollar after that slightly less important.


Money doesn't make you happy. I now have $50 million but I was just as happy when I had $48 million.
- Arnold Schwarzenegger
posted by JackFlash at 8:49 PM on February 26, 2007 [2 favorites]


geos writes "my main expenses are food and rent and there is no sales tax on grocery items where I live. bottom line: for the msn.money reader maybe, but the world of under 20K is a totally different beast. "

A significant chunk of your rent is to cover property taxes.
posted by Mitheral at 8:55 PM on February 26, 2007


This paper by the same authors argues that a flat 23% tax would produce the same revenue as the current tax system.

How does collecting 23% produce the same revenue as collecting 40%?

Elfin magic? The kind that comes out of the south end of a north-facing male bovine?

Finding exactly which yahoos actually fund the National Bureau of Economic Research, Inc is left as an exercise for anyone who actually enjoys that sort of activity.
posted by hexatron at 8:58 PM on February 26, 2007 [2 favorites]


Lets say I make $500k a year, and I have a $45 million dollars in investments, in the railroad company CSX. I pay the federal government 42%, $210k. Meanwhile CSX, with a 17 billion dollar market cap gets a corporate wellfair check for $164 million.

Delmoi, you're going to have to give a cite or do a little better. It looks like book taxes were about 29% last year ((1841-1310)/1841).* This suggests to me that the firm is generally subject to (and compliant with) the same corporate tax rate as everyone else. It also pays a dividend on which its shareholders must pay tax. So even with the alleged welfare payment (which I did not find after a cursory search), it appears that the negative tax rate you later cite in BLINK is just factually wrong.

I'm certain that I loathe corporate welfare every bit as much as you do, but we ought to keep the facts straight, no?

*I haven't read the 10-K, but with capex of 1639 (versus 857 of depreciation), I'd bet that the firm's tax rate would be in the mid-thirties were it not for its engagement in the (legal and widespread) practice of taking accelerated depreciation charges.
posted by Kwantsar at 9:08 PM on February 26, 2007


How does collecting 23% produce the same revenue as collecting 40%?

Some of that 40% is sales tax, property tax, etc.
posted by oaf at 9:14 PM on February 26, 2007


Also, we usually base taxes off of income, rather than wealth or assets. A firm's market capitalization (the market's estimate of the discounted value of future cashflows to the firm's shareholders) does not and ought not figure into the computation of tax liability. If you can't see why, I'd be happy to explain.
posted by Kwantsar at 9:15 PM on February 26, 2007


Jackflash: well, I don't think that all the arguments for the efficiency gains of a flat tax are wrong (although I don't disagree that a lot of the proponents are creeps), but I would agree that the efficiency gains are realized in implementations where the government is obliged to collect less information. Unfortunately, reintroducing progressivity into the system probably requires precisely the information you just got rid of.
posted by ~ at 9:18 PM on February 26, 2007


~: I guess I don't follow. Why does progressivity require more information. You just need one number ... your income. You are taxed at a sliding rate based on your income. You total up your income, look it up on a chart and you're done.
posted by JackFlash at 9:35 PM on February 26, 2007


A significant chunk of your rent is to cover property taxes.

and an even more significant part is for payments on the landlords boat, or the previous landlords boat or the bankers boat and his second home.

and how much is my marginal rate if i include the speculative bubble in the real estate market as a 'tax'...

or how about the 'gas' 'liability' and 'repair' taxes i pay because of the lack of efficient and comprehensive public transportation in and around my rural domicile?

and if you're chuckling at the angry socialist, you might consider that people used to laugh at the idea of publically funded schooling and retirement: counted as taxes in this 'article.'

it's baffling how people getting million(s) dollar bonuses for gambling with union pension fund money can get some guy getting $40K to think the injustice is how much tax he's paying so his kids can go to school and he doesn't get kicked to the curb when he's too old to work. but oh wait, those are other peoples kids right and your assets are going to appreciate like mad due to your superior 'strategic thinking'... go on, please.
posted by geos at 9:38 PM on February 26, 2007


Kwantsar

Also, we usually base taxes off of income, rather than wealth or assets.

well, except for the estate.. err DEATH tax. and capital gains isn't exactly income either.

ultimately taxes should be paid based upon the mutually and democratically agreed public obligations of government and the ability of individual citizens to pay for those obligations. the distinction between income and assets in that regard is somewhat artificial: if you have more, you can afford more. people go to pawn shops to pay the rent all the time.
posted by geos at 9:50 PM on February 26, 2007


well, except for the estate.. err DEATH tax. and capital gains isn't exactly income either.

Hence the word "usually." And a capital gain is more or less income. You use a quaint moral justification (good luck with mutuality!), but there are a million reasons why (if they are to be taxed at all) corporations should be taxed on flows rather than stocks. The most obvious reason, of course, is that having an asset does not always translate into an ability to pay. Add to that different treatments for tangible property and intangible property, the odd incentives (operating leases for offshore assets, depletion of capital stocks, incentives to run with insufficient inventory), and, should you choose any sort of net measurement, an overleveraging the likes of which we have never seen, and you have a recipe written by an idiot.
posted by Kwantsar at 9:59 PM on February 26, 2007


jackflash: yeah, although you (the tax collecter) would probably want to verify that the reported income was true. I think the main thrust of the argument is the relative simplicity of having employers deduct a flat rate from each employee's paycheck. (Obviously only for those with employers.)

There's less information required to deduct a fixed proportion of every dollar paid, compared with rates that are conditional on the yearly income of the individual. No need to coordinate between employers, for example, or across time periods. But... as soon as you complicate matters by having x$ tax-free, you suddenly need to coordinate between employers and over time again.

(although, again i agree / think that flat tax proposals at least in NA usually sound like regressivy, no-capital-tax systems.)
posted by ~ at 10:04 PM on February 26, 2007


It's worth noting that the paper discusses marginal tax rates, not average tax rates. The paper doesn't claim that pretty much everyone loses 40% of their income to the government: just that 40% of the last dollar they made went to the government.

This in no way implies that taxation is non-progressive (in fact, incentives for lower-income households seem to be one of the main reasons for this result)---but what it does tell you is what the incentives are for someone to put in an extra hour of work, get a better job, save money, or so forth. The interesting conclusion of the paper (as far as I could tell) was that the byzantine system of taxes and transfer payments has led to the government completely losing control of the incentive structure of the tax system. Some people have far greater incentives to work harder than others do, but which people these are is a matter of chance.

The policy implications here are major if you want to reduce income inequality. What you'd like is for the guy earning 7 figures to work less, and the guy earning $10k/year to work more, so that both their earnings approach the median. But transfer programs can have a "two steps forward, one step back" effect: when people reach the income level where the transfer programs start phasing out, their incentive to earn more money drops dramatically. And nobody in the government is making sure that these unintended consequences don't kick in.
posted by goingonit at 10:05 PM on February 26, 2007


The policy implications here are major if you want to reduce income inequality. What you'd like is for the guy earning 7 figures to work less, and the guy earning $10k/year to work more, so that both their earnings approach the median.

Well, I suppose that's true, but is wanting high earners to work fewer hours (so they earn less, produce less, and pay fewer taxes) really a sensible tactic for reducing income inequality, or will it only reduce inequality for its own sake?
posted by Kwantsar at 10:09 PM on February 26, 2007


Inequality versus efficiency is always a trade-off. The only way to provide incentives to the poor is to tax somebody, and that somebody will now have less incentive to work than they used to. Since we're providing incentives to the people whose labor the market values least, the people we're taxing will have to have higher-valued labor, which will result in a net efficiency loss.

If you view reducing income inequality as a worthy goal, then this is an acceptable trade. But it is a trade, no matter what.
posted by goingonit at 10:16 PM on February 26, 2007


The poor won't accumulate capital no matter what you do to the tax code; inability to make strategic life choices successfully is why they're poor in the first place (with heart-rending tragic exceptions aside).

That is circular. The predestined poor you speak of often inherit their poverty, from overtaxed parents. Any tax on money earmarked for living expenses creates a lower standard of living, and hurts the economy, without even assuming anyone's character. It's an unrelenting burden that expresses itself over time. The point is to wait until people have means before we tax them.

one of the attractions of the flat tax is its simplicity, and concomitant reduction in costs. You lose much of both of these when you introduce an "untaxed" portion of earnings. The question is then a quantitative trade off between progressivity and complexity / cost between the "flat" tax and a regime with more than two brackets.

Nothing is more simple than a flat tax after standard deductions, which should include the cost of living. A flat tax on all income is regressive, and even punative when sales tax is factored in. I don't see any simplicity in taxing the poor more than the wealthy. I was aiming for fairness anyway. The logic in using the average income line was to avoid an arbitrary number that stagnates, like the minimum wage. The average income line then becomes a center of gravity, logically pinned to the concept of equality.
posted by Brian B. at 10:25 PM on February 26, 2007


~: There is no more information required for paycheck deductions. They do exactly the same thing today. They look at your gross pay each week, look it up in a table and deduct the tax. It's based on each paycheck, not your annual income. If you work overtime one week and have a higher gross paycheck, they just look up a different number in a table. It's not complicated at all. Except in most cases it's done by computer and perhaps requires a few seconds of computation for 1000 employees. Whether everyone has a fixed rate or a progressive rate it is still a simple calculation. If you are working two jobs, it might increase your tax rate so you fill out a W-4 form telling your employer how many exemptions you require and they use a modified table. This isn't rocket science. It just 6th grade arithmetic.
posted by JackFlash at 10:37 PM on February 26, 2007


delmoi scribbles in his own excrement: So where would the government make its money? By taxing under performing assets.

"I've known you for fifty years and I'm sorry your husband died. But your apartment is an asset and it's underperforming, so we have to throw you in the street."
posted by lupus_yonderboy at 10:55 PM on February 26, 2007


Jack, for the superflat-flat-tax we're talking about, the government doesn't even need to know how much the individual made in the year. A buck of income is taxed at the moment it's paid. Once you need to start keeping track of how much you've made, I'm basically with you: the math is simple in either case. The pain is in the government having to care if you're not declaring all your income.
posted by ~ at 10:59 PM on February 26, 2007


MattD wrote: inability to make strategic life choices successfully is why they're poor in the first place

Wow, the forces of mean are out in full force tonight.

I'm curious, MattD -- have you hung out with the poor much?

I'm privileged to hang out with people whose annual income is in the low 8 figures and in the low 5 figures. There is definitely some difference there in smarts, but if you switched the bottom 75% of the people born rich and the kids born poor at birth, you'd not be able to tell the difference.

Overwhelmingly, people are poor because they are born that way, not because there's some "strategic life choices" exam that they flunk at some point in their lives.

An awful lot of poor people are really good at making "strategic life choices" (I spit at you), but their choices are highly restricted due to skin colour, condition of birth and lack of education.
posted by lupus_yonderboy at 11:03 PM on February 26, 2007


I'm privileged to hang out with people whose annual income is in the low 8 figures

That's higher than the top one hundredth of the 99th percentile! Did you meet them at Drexel?
posted by Kwantsar at 11:14 PM on February 26, 2007


How does collecting 23% produce the same revenue as collecting 40%?
From the April 1996 Congress Joint Economic Committe:
High marginal tax rates discourage work effort, saving, and investment, and promote tax avoidance and tax evasion. A reduction in high marginal tax rates would boost long term economic growth, and reduce the attractiveness of tax shelters and other forms of tax avoidance. The economic benefits of ERTA were summarized by President Clinton's Council of Economic Advisers in 1994: "It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth." Unfortunately, the Council could not bring itself to acknowledge the counterproductive effects high marginal tax rates can have upon taxpayer behavior and tax avoidance activities.
The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988
The 1993 Clinton tax increase appears to having the opposite effect on the willingness of wealthy taxpayers to expose income to taxation. According to IRS data, the income generated by the top one percent of income earners actually declined in 1993. This decline is especially significant since the retroactivity of the Clinton tax increase in that year limited the ability of taxpayers to deploy tax avoidance strategies, temporarily resulting in an increase in their tax burden. Moreover, according to the FY 1997 Clinton budget submission, individual income tax revenues as a share of GDP will be lower during the first four years of the Clinton tax increase, which include the effects of the 1990 tax increase, than under the last four years of the Reagan tax changes (FY 1986-89). Furthermore, according to a study published by the National Bureau for Economic Research,[2] the Clinton tax hike is failing to collect over 40 percent of the projected revenue increases.
The Reagan tax cuts, like similar measures enacted in the 1920s and 1960s, showed that reducing excessive tax rates stimulates growth, reduces tax avoidance, and can increase the amount and share of tax payments generated by the rich. High top tax rates can induce counterproductive behavior and suppress revenues, factors that are usually missed or understated in government static revenue analysis. Furthermore, the key assumption of static revenue analysis that economic growth is not affected by tax changes is disproved by the experience of previous tax reduction programs. There is little reason to expect static revenue analysis to evaluate the economic or distributional effects of current tax reform proposals much better than it evaluated the Reagan tax program 15 years ago.
Analogous results were seen in the Republic of Ireland and the Netherlands.
posted by No Mutant Enemy at 12:57 AM on February 27, 2007


Wendell, home ownership deductions apply to the interest paid on a loan. When you get well into a loan, you are paying more principal and less interest. Sometimes it makes more sense to pay off the mortgage.

MattD says "The poor won't accumulate capital no matter what you do to the tax code; inability to make strategic life choices successfully is why they're poor in the first place (with heart-rending tragic exceptions aside)." I do not have the cojones to make statements like this. I thought most poor people were born poor, and our myth of social mobility aside, die poor. Maybe you are right that the maze has cheese, and they are deciding their path, but I think that is the exception to the rule. I wish I could articulate this better, but my feeling is that their strategic decision making skills good or bad are barely relevant to their poverty. I think you have to live with both good cash flow and bad to understand why this is the case.

Delmoi, for the love of god, dont <blink>.
posted by BrotherCaine at 2:03 AM on February 27, 2007


Also, we usually base taxes off of income, rather than wealth or assets.

well, except for the estate.. err DEATH tax.


Receiving money from another source is suddenly not income because the person had to die first for you to receive it?

I understand people not liking taxes or tax rates but the anti-estate tax movement has always been one of those things that just frustrates me. It's sensible, affects only the vastly rich in America, and fixes a loophole of untaxed accrued wealth being untaxed in some cases indefinitely, and yet the top ten richest families in America have managed to convince half the country that this is a greater blow to American enterprise than kids being unable to go to college- or a doctor.

And they defend it by lying. That's what's the most angering about it. At least the gun nuts talk about the 2nd amendment and the need to defend their homes and so forth. The Estate Tax nuts just say "it's double taxation!" and they know it's complete bullshit and don't care.
posted by XQUZYPHYR at 5:04 AM on February 27, 2007


Metafilter: <BLINK> lives!
posted by seanmpuckett at 5:52 AM on February 27, 2007


It annoys me quite a bit that this thread had to be up for 5 hours before goingonit pointed out the difference between "marginal" tax rates and one's total tax burden. The tax on your next dollar of income is likely to be relatively high (eg, the 40% range). However, your overall tax burden (the total amount you paid in taxes on the first $XX of income) is generally pretty moderate.
posted by deanc at 6:53 AM on February 27, 2007


No Mutant Enemy, you might have noticed that the screed you posted is a piece of Republican propaganda. It was written in 1996. Of course nothing that they wrote in that piece came to pass. After the Clinton tax increases the economy expanded at a rate greater than in the past 50 years and the budget was balanced for the first time since the 1960's. To the contrary, both the Reagan and Bush tax cuts decreased revenues and caused record deficits.
posted by JackFlash at 8:30 AM on February 27, 2007 [2 favorites]


My problem with the estate tax isn't what it does to cash inheritance, because, in that case, it's easy to pay. But if the value of the estate is tied up in some non-liquid form, like, say, the family farm that is being slowly overtaken by urban sprawl, there's often no way to pay the tax except to let the real estate developers parcel it out into McMansion plots. And I know people in exactly that situation; they can sustain the property taxes, but the giant lump-sum tax liability that's going to hit them sooner or later is going to be ... interesting. And, no matter how often or stridently folks talk about underperforming assets, I just can't see trading that wonderful place for yet another subdivision as being a good deal.

Phrased differently, there are things that are worth more to me than any amount of money a reasonable person would pay for them. If I were forced to sell them at market value, it would be a considerable net loss for me, inflicted by whoever forced me to sell them.

Of course, it would be essentially impossible to implement a robust estate tax that only taxed "liquid" inheritance without the potential for abuse, to I come down against the estate tax every time.
posted by MadDog Bob at 9:19 AM on February 27, 2007


Oh, the old family farm canard. The estate tax already exempts $2,000,000 with no tax at all. For a husband and wife the exemption would be $4,000,000. In addition to that there is a special exemption of up to $1,000,000 for working farms. That's a $5,000,000 exemption. You are worried about family farms worth more than $5,000,000?

The American Farm Bureau could not cite even one case in which a family farm was lost due to the estate tax. After Katrina, the opportunists in the Bush administration sent researchers to the south to try to find examples of family farms lost to the estate tax because of Katrina. They could not find a single one.

The average small family farm has a value of about $500,000 and the average large family farm has a value of about $1,500,000. Neither of these are even close to being touched by the estate tax.
posted by JackFlash at 10:01 AM on February 27, 2007 [3 favorites]


Sure, for farms worth 5+ million. If your "family farm" is worth so much it should be taxed. Why should the beneficiaries of such a large estate be entitled to income of more than 5 million tax free?
posted by Mitheral at 10:05 AM on February 27, 2007


Outa my league. But interesting. Thanks.
posted by Smedleyman at 10:07 AM on February 27, 2007


Of course nothing that they wrote in that piece came to pass.
Except the bits that, according to non-Republican sources (see where it says 'IRS data'), had already happened. And the bits that had happened when Kennedy reduced top tax rates. And when Harding and Coolidge did the same.
posted by No Mutant Enemy at 10:28 AM on February 27, 2007


Not quite true, JackFlash.

Oddly, the tax reductions resulted in increased government revenue. Personally, I think that is because more money moved around, making opportunities for bits to get seen by taxes that larger pools shelter from.

Not odd at all was the reaction of Congress to more revenue-- more spending, faster than the money could be collected, and at higher rates.

The recent expanding deficit is not the result of reduced taxes, but the no-tax-but-still-spend current Republicans. They are only slightly distinguished from the slight-tax-and-spend-too-much Democrats. I've not seen any no-tax-and-let's-stop-being-stupid legislators, but maybe they're hiding for fear of being pecked to death by PACs....

Reps and Senators, listen up! If you want to spend the money, have the cojones to actually bill the current population for it so they can decide if they want you making these decisions. I know I'd vote you out for corporate welfare, land grants to build unnecessary projects, and unaudited emergency Halliburton contracts. Just own up to them.

Oh, and as to the family farm thing -- note that the best exceptions are for working farm sales, not for grandma who outlived her husband, sold off the cows, lives in an encroaching suburb, and suddenly finds herself sitting on some developer's plan for new homes. I live down the street from one of these developments, where a single property now has 61 $800,000 homes. That's $48M in homes. Now, if she sold the property for anything over $2M, she's in a world of hurt. Is that fair?

Or, is the amount that's left after taxes the price she gains for good fortune and the progress of home builders around her? Would that my widow (my wife's family history shows she should outlive me by 20-30 years) could be so lucky when the time comes! I'm of a mixed mind on it.

See, I'm not in favor of taxing income, as it causes people to hide how much they make. Instead, I prefer to tax outgo(spending) because the only way to avoid taxes then is to reduce, recycle, or reuse. I'm all for that.
posted by dwivian at 11:04 AM on February 27, 2007


Oddly, the tax reductions resulted in increased government revenue.

You are confusing cause and effect. Revenues increased because of a normal economic cycle in which we were coming out of a recession. The tax cuts didn't cause this to happen. Clinton raised taxes and we came out of a recession. Tax cuts had little to do with it. It is like the rooster that crows in the morning proud of the fact that he made the sun rise.

All reputable economists agree that tax cuts do not pay for themselves. In fact Greg Mankiew, Bush's chairman of the Council of Economic Advisors calculated that tax cuts recover only 20% to 50% of the revenue that would have been collected if there were no tax cuts. In other words, the stimulative effect is very weak and doesn't make up for the losses in revenue due to lower rates.

The recent expanding deficit is not the result of reduced taxes, but the no-tax-but-still-spend current Republicans.

Nope, only about one-third of the recent debt can be attributed to increased spending. About a third is due to the war on terrorism and a third due to the foregone revenue because of the Bush tax cuts.

Now, if she sold the property for anything over $2M, she's in a world of hurt. Is that fair?

If she sold the property for $2,000,000 she would pay a maximum capital gains tax of 15% and would have $1,700,000 left over. Anything over $2,000,000 would also be taxed at 15%. She would hardly be reduced to eating Alpo.
posted by JackFlash at 11:35 AM on February 27, 2007


lukemeister, that's what I was complaining about. As for it being a steal at $5... for a Poor College Student, that's food for a day. Or a Metafilter account for a friend.
posted by JHarris at 11:45 AM on February 27, 2007


JackFlash -- I have to disagree. Family friend, you see. She got hit with the AMT in spades. Even so, the cost was less than had she died and left it to her family, so her kids got her to sell out, move to a smaller space, and sock the rest away for medical expenses, which I understand she's rapidly depleting since she's 91.
posted by dwivian at 11:55 AM on February 27, 2007


dwivian writes "Now, if she sold the property for anything over $2M, she's in a world of hurt. Is that fair?"

Let's say for arguement the tax rate was 50% and she sold the property for 3 million. Anyone with 2.5 million in their pocket ain't in a world of hurt. The average person doesn't make that before taxes in their lifetime.
posted by Mitheral at 11:57 AM on February 27, 2007


I also disagree with the "normal economic cycle" statement. It is as if you are saying "waving hands! really!" What causes these cycles? How does taxation impact them? If we don't go back into the causes of the cycles, we end up with the same logic that brought us Intelligent Design. Ugh.

The "all reputable economists" statement doesn't wash, either. I would be willing to bet that there are a few that disagree. Personal experience, and all.... When I was in college, an economist came to lecture and explained the concept of increased revenue from decreased taxation on certain income. Did a good job. Your only defense is to call him disreputable for having a differing position. I can't accept that.

Finally -- reducing taxes, in my mind, is always good, so long as the government is spending money on crap (like that blasted war we're in). Any chance we get to take the numbers down is great -- so long as we can convince the legislators to stop spending what they don't have. So far, though.....
posted by dwivian at 12:01 PM on February 27, 2007


Mitheral -- eh, $1.5M, you mean, but still.... yeah, compared with what she COULD have had, or what her kids could have had by careful distribution, maybe. It was all kinda ugly. As are the houses the developer is putting on what used to be a rather pretty horse farm.

I'm also curious about your 'average person' comment. $1.5M, over a standard working career (50 years), is $30k a year. Accounting for inflation, I'd be surprised if average people didn't make that now. Of course, I'm using the concept of MEAN, and not MEDIAN. Knowing what 'average' is matters, too.
posted by dwivian at 12:06 PM on February 27, 2007


She got hit with the AMT in spades.

Even if she was subject to the AMT, the capital gain on her property is only taxed at 15%. If she sold for $2,000,000 she would still have $1,700,000 left over. The rest of her income would be taxed at 28% under the AMT, leaving her with 72%.

Now if she had extremely high medical expenses, she would lose that deduction under the AMT but worst case she would still have 72% of her income after taxes. But that is a problem with the AMT which most people agree needs to be corrected. It has nothing to do with the estate tax.
posted by JackFlash at 12:16 PM on February 27, 2007


What is completely missing from this debate is the insane amount of military spending.

The military budget should be cut in half, other spending should go up by 15%, the true tax rate should be closer to 25%, and people making less then $20,000 per year should pay no tax at all.
posted by cell divide at 12:30 PM on February 27, 2007


Finally -- reducing taxes, in my mind, is always good, so long as the government is spending money on crap (like that blasted war we're in). Any chance we get to take the numbers down is great -- so long as we can convince the legislators to stop spending what they don't have.

Ah, now the "starve the beast" canard. You must spend a lot of time reading Larry Kudlow. You might be interested in this article by William A. Niskanen, chairman at that radical leftist Cato Institute. He found that "starving the beast" actually has the opposite effect. Whenever taxes are cut, spending increases and whenever taxes are raised, spending decreases. It turns out that government obeys the laws of supply and demand just like markets. If people perceive government as cheap (tax cuts), they want more of it. If they perceive it as expensive (tax increases), they cut back spending. That is exactly what we saw in the Reagan era (tax cuts, massive spending increases, massive deficits) , followed by Clinton's tax increases (spending decreases, budget surpluses), followed by Bush (tax cuts, record spending increases, record deficits).
posted by JackFlash at 12:35 PM on February 27, 2007 [1 favorite]


I also disagree with the "normal economic cycle" statement. It is as if you are saying "waving hands! really!" What causes these cycles? How does taxation impact them?

People can argue about theory, Laffer curves and all that stuff but you can't argue with the empirical facts. Under Reagan and Bush, taxes were cut. Under Clinton taxes were raised. In all three cases the economy recovered from a recession. So it's a little hard to prove that tax policy was a major influence.

And in fact, the strongest recovery occurred under Clinton after raising taxes. Don't be fooled by those phony economists who mix nominal and real growth rates. Under Reagan inflation was in double digits making the growth look bigger than it really was. After adjustment for inflation, revenues increased faster after Clinton's tax increases than any time since WWII.
posted by JackFlash at 12:55 PM on February 27, 2007


My accountant told me this last year. When I asked how I could save from my high tax bills (I don't have any office space or inventory, nor an army of employees, so my write-offs are slim), he looked at everything, said he did what he could, and that in the future "just know that 40% of everything you make goes back into taxes, no matter what you do."
posted by mathowie at 6:09 PM PST on February 26 [+] [!]


There are lots of things you could do to reduce your taxes, but most require risk. You could roll your profits into a small business investment, tax-free, or to some property investments that provide tax incentives. But that requires you to get into a business that's simply not at your core.

The USA has a complex tax structure to be sure. But that leaves lots of loopholes to be exploited - mainly by the people with the time and resources to find and exploit them.

A multi-millionaire relative of mine is a resident of a tax free state yet lives in another state where there is no sales tax. Pretty much every transaction he makes goes through one of his S or C corps, depending on the tax benefits.

If one of his companies loses loads of money and goes out of business, he'll keep it around on record instead of dissolving it. That way when another company starts profiting he'll merge them and Company B inherits Company A's tax write-offs and gets that much profit tax free.

Having a complex tax structure is akin to having lots of options at the store. You can shop around for the taxes you want to pay. But the only people who really have the resources to do so are wealthy already.
posted by b_thinky at 1:01 PM on February 27, 2007


b_thinky brings up an important point. The current tax system is very simple at its core. You just total up all your income, look in a table and find your tax. But there are over 10,000 pages in the tax code. Those pages are not about levying taxes, they are all about how to get out of paying taxes. Over the years congress just keeps adding more and more loopholes for special interests. People complain about the complexity of the tax code and say that you have to junk it and replace it with something else like a value added tax or flat tax. But than isn't really necessary. All you have to do is keep the present tax structure but get rid of all the thousand of pages of exceptions. As a result of getting rid of the deductions and loopholes you could reduce the basic, but still progressive, tax rate.
posted by JackFlash at 1:18 PM on February 27, 2007


Delmoi, you're going to have to give a cite or do a little better. It looks like book taxes were about 29% last year ((1841-1310)/1841).* This suggests to me that the firm is generally subject to (and compliant with) the same corporate tax rate as everyone else.

Well, it was a hypothetical example, but The first three links here mention CSX's net negative tax of $164 million. This was in 2003.
posted by delmoi at 2:10 PM on February 27, 2007


delmoi scribbles in his own excrement: "So where would the government make its money? By taxing under performing assets."

"I've known you for fifty years and I'm sorry your husband died. But your apartment is an asset and it's underperforming, so we have to throw you in the street."


An apartment is not an asset. What you're trying to illustraight, I do not know. I support social security, and presumably people will be able to use that money to pay rent. I don't want to see people thrown out of their homes, Any problem caused by taxing poor people can be alleviated by various social programs.
posted by delmoi at 2:17 PM on February 27, 2007


JackFlash -- no, never read the guy. This isn't a "starve" anything argument. I feel that government is too large, and should be reduced. A side effect of this will be reduced taxation (after clearing the deficit, then the money owed back to FICA, then the national debt). It's a pipe dream, but one I would love to see happen.

The reason government spends so much is people have come to expect the government to solve all their problems and that takes cash. If we could undo that, we might actually fix our system before it implodes.

I'll check with my friends later, but I seem to recall that grandma had to pay 25%, which may be a result of previous tax actions on the farm while it was working (a quick read of capital gains says that real estate that had previously been depreciated is taxed higher at sale to prevent "double" benefit).
posted by dwivian at 4:27 PM on February 27, 2007


25%! 25% taxation truly is a crime against humanity and an abomination before the Lord. Crowds gather in villages through Africa to weep for this poor dear, who has to make do with only being rich instead of somewhat richer. What sad and woeful times are these where passing ruffians can say "Ni!" at will to old ladies, and the government imposes such terrible burdens on them.
posted by ROU_Xenophobe at 4:44 PM on February 27, 2007 [1 favorite]


Richard Daly: You want to talk a flat tax, let's have a flat tax on utility, not money. By the law of diminishing returns (decreasing marginal utility) your first and only dollar is incredibly important, and each subsequent dollar after that slightly less important.

Some of us don't believe in any metaphysical property called "utility", and certainly not utility of the cardinal variety. But even if there were some magical, mystical, metaphysical property that could be measured and compared across humans that corresponded to common (confused) notions of "happinesss" or "satisfaction", a flat tax on it doesn't seem particularly compelling. What policy or principle would recommend that everyone sacrifice an equal proportion of their happiness, when some people find themselves in situations vastly more conducive to "happiness" than others?

Socrates once said: "What a strange thing that which men call pleasure seems to be, and how astonishing the relation it has with what is thought to be its opposite, namely pain! A man cannot have both at the same time. Yet if he pursues and catches the one, he is almost always bound to catch the other also, like two creatures with one head." [Plato, Phaedo 60b] Accordingly, I tend to think that the utilitarian view of human psychology is horribly simplistic and fails to account for the rich complexities of our inner lives. It also seems to me to overemphasize the importance of our inner lives---I'm not sure our psychic qualia are what we should focus on. But the lay-economist view is a hundred times worse (my evaluation metric is cardinal, naturally): that such "happiness" is derived from nothing more than the amount of various goods to be consumed (and perhaps the likelihood of consuming any particular consumption bundle). Has a worse model of the human psyche ever been suggested?

delmoi: An apartment is not an asset.

It can be, and usually is. Even if you don't happen to own the apartment8212;most leases require periodic payment in advance of the rental term, so most lease-holders pre-pay for their tenancy. When you've paid, and the service has yet to be delivered, you're holding an asset. There may be restrictions on alienation (sale or transfer) of some apartment leases, but that doesn't mean they aren't assets.

dwivian: reducing taxes, in my mind, is always good, so long as the government is spending money on crap (like that blasted war we're in). Any chance we get to take the numbers down is great -- so long as we can convince the legislators to stop spending what they don't have. So far, though.....

I'm not sure debt is always a bad tool to have in the toolbox, but I also don't think there's good reason to think that reducing taxes does much to reduce spending: recent US trends, at any rate, suggests exactly the opposite. Generally speaking, though, I don't understand why anyone thinks current government revenues should be matched to current expenditures. We are paying quite a bit just to service our current debt, but people are still willing to lend money to the government at astonishingly low prices...
posted by dilettanti at 9:15 PM on February 27, 2007



dilettantl:
Generally speaking, though, I don't understand why anyone thinks current government revenues should be matched to current expenditures. We are paying quite a bit just to service our current debt, but people are still willing to lend money to the government at astonishingly low prices...
------------

So what happens if that stops? What about creditors recalling debts (since if people are unwilling to lend to us, they may also be unwilling to let us service debt any longer)?

Do we just ignore these issues and pray for them not to happen?
posted by zhivota at 9:45 PM on February 27, 2007


Where did this idea of good debt begin? I know that Milton Friedman preached it, but as a knee-jerk lenders tradition of owning the government in your pocket (he specifically claimed it guaranteed "our" freedom, but I don't who he was referring to directly).
posted by Brian B. at 10:34 PM on February 27, 2007


Whenever taxes are cut, spending increases and whenever taxes are raised, spending decreases.
Am I misunderstanding or are you failing to distinguish between public and private spending? When the Government increases taxes, I spend less of my money because I have less of my money; meanwhile, the Government spends more of my money because it has more of my money. I can't remember what happens when the Government decreases taxes because it's a long time since it happened, but reason suggests that I'd spend more; it is, after all, money that I've worked for.

On top of that, the way it works in UK is that the Government decides what it wants to spend and increases taxes accordingly; this notion of cutting your coat to suit your cloth (as in "We can't afford to do XYZ, so won't") really doesn't apply.
posted by No Mutant Enemy at 12:06 AM on February 28, 2007


I was talking about government spending in relation to the conservatives "starve the beast theory" that cutting taxes results in cutting spending. Exactly the opposite is true.

Whenever taxes are cut, government spending increases and when taxes are raised government spending actually decreases. Spending is not directly tied to revenues because the government regularly spends more than it collects by creating deficits. Spending has more to do with the perceived pain of paying taxes.

The relationship is the opposite of what conservatives expect but is explained by a simple supply-demand curve. When the perceived cost of government goes down (lower taxes) the public wants more of it, even if it results in deficits. When the perceived cost of government is high (taxes raised) the public demands less. This is the same as the demand for hamburgers. When hamburgers are cheap, you buy more of them. When hamburgers are expensive, you do without. The conclusion is that if you want to reduce government spending, the best way is to raise taxes.

On top of that, the way it works in UK is that the Government decides what it wants to spend and increases taxes accordingly

This might be where the confusion occurs. In the U.S. what Congress decides to spend and how much Congress decides to tax are separate decisions. They frequently decide to just spend more than they tax by creating public debt.
posted by JackFlash at 1:53 AM on February 28, 2007


They frequently decide to just spend more than they tax by creating public debt.
Well, public debt is effectively the same as tax, because tax revenue will be used both to repay the debt and to service the loan. The advantage is that it will be a future Government that gets to raise taxes to pay for the current Government's irresponsiblilty.

On your other point, I think that one of us is very confused, and I honestly don't know which. When my Government increases taxes (which it does, with alarming regularity), I expect to get more from them (because they're taking more of my money), not less (because everything must be so expensive, otherwise they wouldn't need so much of my money). If they ever reduce taxes, I would expect (and welcome) reduced state spending. Of course, that argument should go the other way round - they should reduce state spending so that taxes (including deferred taxes, ie debt) can be reduced.
posted by No Mutant Enemy at 4:47 AM on February 28, 2007


If they ever reduce taxes, I would expect (and welcome) reduced state spending. Of course, that argument should go the other way round - they should reduce state spending so that taxes (including deferred taxes, ie debt) can be reduced.

That is the point of the article I cited above. The empirical evidence is that Congress behaves exactly the opposite of the way that you expect. A low tax rate gives the perception that government services are cheap so Congress buys more government services. A high tax rate gives the perception that government services are expensive so Congress buys less government services.
posted by JackFlash at 8:36 AM on February 28, 2007


zhivota: What about creditors recalling debts (since if people are unwilling to lend to us, they may also be unwilling to let us service debt any longer)? Do we just ignore these issues and pray for them not to happen?

First: the good thing is that our creditors generally can't "recall" the debt. The US government's principle means of borrowing is the issuance of Treasury securities. A few of these securities have call provisions [outdated article], which allows the Treasury Department to "call" the debt instrument---that is, to pay a pre-determined value to retire the instrument. Essentially, the Treasury can sometimes pre-pay [.pdf] its obligations without further penalty. But holders of Treasury securities usually can't demand accelerated payment from the government. They can sell their securities on the open market, but they can't make the government pay faster than they promised to pay in the initial contract. The exception, of course, is the savings bond, which can be redeemed early, but with a penalty if redeemed too early.

Second: I certainly didn't mean to imply that I think accumulating debt is an unqualified Good Thing. Obviously, debt can be very costly. The government in particular faces some real challenges: if they borrow too much, investors may begin to worry about the likelihood of timely repayment. They will begin to demand higher interest rates to compensate for the additional perceived risk, and the government will find itself paying more for debt. Astonishingly, this hasn't really happened to any appreciable degree, despite the looming damper on productivity (and massive increase in non-discretionary entitlements) from to the aging of the population, and the already astronomical---and rapidly increasing---public debt. But many economists think that, if we're going to balance the budget, it more sense to balance it over the business cycle, funding deficits during recessions with surpluses during booms. Of course, few politicians have ever met a surplus they couldn't spend... But debt can also be used to fund capital and infrastructural investment---which, as investment can more than pay for itself over time. So debt can be a useful tool in the right hands.

Brian B.: Where did this idea of good debt begin?

I don't know, exactly---our cultural views on debt have certainly changed dramatically over time. Part of it, I imagine, is that we are now better than ever before able to (1) predict the future, and (2) insure against risk. Part of it probably had to do with the government expenditure programs initiated after the depression, and the massive spending boom beginning with WWII. Maybe part of it has to do with the so-called "American Dream" of home-ownership really catching on in the middle class. For most people, home-ownership is next-to-impossible to achieve without taking on substantial debt. But this is all speculation on my part.

As I said before, debt can be a useful tool: it allows individuals to smooth their consumption over time, to take earlier advantage of a rising wage path, and it gives them more options for allocating their human capital, savings, and consumption over time. It also helps the state to initiate infrastructure and capital investments much earlier than we could if we had to have all the cash up front - which allows us to begin reaping the rewards of those investments that much earlier. Of course, debt has substantial limitations, and it is easy to forget the price one pays for using the tool. We humans funny creatures; we are myopic and overly optimisitc, we make unrealistic estimates of risks we face, we procrastinate, we mistakenly think our own good personal characteristics make us less likely to suffer misfortunes...
posted by dilettanti at 3:37 PM on February 28, 2007


The big plus on government debt is economic manipulation to curtail excessive business cycles.
posted by BrotherCaine at 5:05 PM on February 28, 2007


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