The other week, I wrote a post in which I observed a connection in the United States between the rate of federal income tax on the wealthy and the rate of economic growth. As the rate of tax on the rich fell, the pace of economic growth appears to slow. However, it was pointed out to me by readers that despite changes in the tax rate, effective tax rates remained more or less the same. In 1979, the formal tax rate, the rate the baseline rate mandated by the tax code, on the rich was 70%, and in 1996, it was 40%, yet the effective tax rates, the rates people actually pay after taking into account deductions and other loopholes, according to the CBO, were only 1 percentage point apart–37% in 79′, 36% in 96′. Surprisingly, according to a Berkeley study, the effective rate of individual income tax on the rich in 1970 was actually lower–32%. Yet despite this, we still have lower growth rates and more inequality. This is bizarre. What on earth is going on? Continue reading “Clandestine Inequality”
Author: Benjamin Studebaker
Population Pays
Remember that immigration reform bill that’s attempting to crawl through the congressional minefield? Back in January, I was critical of the bill, because it seems to presume that reducing immigration numbers is still a desirable goal. I argued that the bill over-emphasized border security at the expense of encouraging immigration, and that increasing immigration was fundamentally advantageous to economic growth, that immigrants contribute more to the economy than they consume in public services. At the time, my view was predominately theoretical. Now, however, we have empirical data. The non-partisan and generally trustworthy Congressional Budget Office (CBO) has released a report in which it predicts that immigration reform would shrink the deficit by $197 billion.
With Apologies to George W. Bush
Guess who’s back, back again? Palin’s back–tell a friend. Sarah Palin, John McCain’s 2008 running mate, has given another speech, this time for the Faith and Freedom Coalition, one of those conservative 501(c)4’s that has so often been in the news lately. What do I find interesting about this Palin speech? The fact that, 5-10 years ago, parts of it could have been made by your average democrat.
Should States Hire Mercenaries?
I was recently asked by a friend for an opinion on the use of private military contractors. After ruminating on the subject off and on for a couple days, I recalled an interesting chain of thoughts I once had on the subject, which I intend to reconstruct today in this piece.
The Irrelevance of Chemical Weapons
Well, it’s been coming for a while now–Barack Obama has decided to arm the Syrian rebels. The justification? The administration believes that somewhere between 100 and 200 people in Syria have been killed with chemical weapons, specifically, nerve agents, even more specifically, sarin. It is too often taken for granted that the use of chemical weapons by the Syrian government provides a good reason for the United States to intervene in the Syrian conflict on behalf of the rebels. The assumption must be questioned–does the use of chemical weapons make it in the interest of the United States to intervene where before it was not in the US interest to do so?
Benjamin Studebaker 