Henry Farrell offers a wingnut manifesto. The loonier corners of wingnuttia, including some sections of ABC News, have determined that the only response to the prospect of a small marginal increase on income over $250,000 is to stop working altogether. Fine. Henry suggests the following a "Go Galt, Go!" manifesto:
We proudly salute “Dr. Helen,” Glenn Reynolds, and Michelle Malkin, for identifying the only possible response to Barack Obama’s victory – ‘going Galt.’ By withdrawing their creative and intellectual achievements from the economy and stopping tipping waitstaff, the schmibertarian right can surely bring the parasites and Democrats to their knees. We look forward to these three thought leaders striking the obvious first blow, by refusing to blog for the ungrateful masses and withdrawing to a secret compound until the world capitulates to their demands! Only a universal wingnut blogging strike can bring the moochers to their senses. John Galt lives!
Perhaps one day we will be able to live in harmony.
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"Perhaps one day we will be able to live in harmony. "
Perhaps. What guarantee would you have to assure them of that it will only be "a small marginal increase on income over $250,000"? How would the coming social security means testing fit into this? That would be a significant retroactive tax increase. Perhaps the idea is to oppose any and all tax increases as a way to postpone the day when the increase requested is no longer a marginal increase? As I am sure we agree, taxing everyone 0%, while probably would be fantastic for raising capital, reducing employment and boosting incomes, would reduce the amount collected by the government to, well pretty much zero. This would have a negative impact on things a knuckle dragging conservative like myself likes. Who would then pay for my huge military? The highways I recklessly drive my gas guzzling SUV? Police, fire? I understand all that. On the other hand, I would hope we both agree that taxing everyone 100% would be equally as bad. While on paper, it looks like that would raise enough money to do pretty much whatever the government wanted, in practice not that many people would continue to show up to work. So somewhere between 0 and 100% should be the tax rate. These folks think that the rate is trending on the wrong side of that magical number and will reduce production, job growth, investments etc. It all comes down to the basic fact that these people are not getting a free ride, they still pay a significant percentage of the total tax collected, and that any time 95% of the population decides that 5% should carry the load, I get nervous. It appears that the top 1% pays about 40% total income taxes. The top 5% pays 60%. The top 25% pays 86% and getting down (finally) to the group I am in, the top 50% pays 97%. So fully 53% of the population pays 3% of the taxes. What would the ideal breakdown be? And if they changed it so the top 25% of taxpayers had to pay 100% of the income tax and I was in the 75% that didn't, what is my incentive to NOT vote in anyone who promised me all sorts of benefits, all paid for by someone else? Like it or not, the rich do provide benefits to society other than taxes. Without them, most of us would be out of a job.
Well, a small marginal increase on income over $250,000 is all that anyone's talking about, so the rest of this is irrelevant until a proposal is put on the table. This Galtian revolution is motivated entirely by misunderstandings of the budget proposal recently sent to Congress, which doesn't offer means-testing for Social Security. I honestly don't know where that's coming from.
I'm entirely ignoring your back-of-the-envelope Laffer curve argument, because we don't need envelope backs. We've got actual data which shows that tax rates would have to be enormously higher than the are before a marginal tax hike would reduce tax revenue, or even appreciably reduce productivity. The top marginal tax rate was 90% during the economic boom of the 1950s, after all. We're talking about an increase from 36% to 39%, a return from the rate which predominated through the economically stagnant Bush years, back to the top marginal rate which prevailed through the longest peacetime economic expansion in American history (the Clinton years). Empirical evidence matters, and it all says that this small increase in the top marginal tax rate will do no economic harm.
And those ultra-rich you're extolling? At least a few of them want to pay higher taxes: http://freakonomics.blogs.nytimes.com/2008/05/01/taxes-warren-buffett-a…