Liberal Named Shirley: Gee willikers, Megan, it sounds like you think the rich are special people who need help!
McArdle: I'm afraid I gave the impression yesterday that I thought the fate of Manhattanites makes $200K+ was infinitely more tragic than the fate of single mothers making $20K. Not so. The point wasn't that beleaguered Manhattanites are particularly worthy of our sympathy--though there really is a disconnect between the lifestyle being taxed in Manhattan and Omaha at similar levels of income. Rather, it's that almost no one, including people who are quite affluent, seems to have realized that they're on the hook for the spending they support.
Shirley: (Giggles) Gosh, I never thought that if people had to pay taxes, I'd have to pay taxes too!
McArdle: Look at our current deficit. There's a reason that most countries do not attempt to fund large welfare states with a very progressive income tax, the way we do*. The income of the wealthy is fungible, mobile, and volatile. These are not strengths from the vantage of the tax system.
Paying for a huge new entitlement which will, at best, grow steadily during downturns, should not be done with a tax that will plummet the way progressive income tax revenues seem to during a depression. See: California, State of.
Shirley: I don't understand. Does that mean that taxing rich people is bad?
McArdle: But at any rate, I was in no way trying to argue that it's unfair to raise taxes on wealthy people. Only that a) doing so seems to raise shockingly little revenue and b) fairly wealthy people seem to be getting a nasty surprise from this, and I expect that the surprises will get nastier as the administration is forced to dip into lower income quintiles who were told to expect a tax cut.
Shirley: Oooh! Oooh! You are a mean, nasty lady who makes me just squirm with anger! Rich people can too afford more taxes--after all, the top 10% of rich people have 71% of the nation's wealth!
McArdle: * (Yes, yes, I know the liberals are squirming in their seats, waiting until they can tell me that it is a MORAL OUTRAGE that I called our system progressive. "Progressive" is a slippery term with many meanings, but in this case, I merely mean that our tax system collects a vastly disproportionate share of its income from the wealthier members of society. The individual income tax, which is the largest single source of revenue, collects 75% of its money from the top 10% of taxpayers. FICA is regressive in incidence, but still collects most of its income from the higher quintiles, for the unsurprising reason that higher quintiles have more income subject to the tax. Calculating corporate income tax incidence is functionally impossible, but one hopes it falls more heavily on the rich than the poor--if it doesn't, we ought to get rid of it.
Shirley (sobbing with frustration): I really want to say something but I'm afraid of such a mean lady!
McArdle: "You are missing the point!!!" you want to say, but for this purpose I am not. I am not making a normative argument about the justice of American tax distribution. I am making a positive argument about the dependence of American tax revenue on the income of the upper quintiles.)
Poor Shirley, who makes such bad arguments and has such an immature attitude. I'm surprised that McArdle can bear to live in a world filled with such imaginary people.
Looks like the manic phase is over - Time for some victim playing.
Which reminds me that I don't have a record player anymore, or the Stone Ponys on CD. Poor, poor, pitiful me.
Megan's so sure that her POV is airtight and without fault, she presumes to know *exactly* how everyone who disagrees with her - and liberals in particular - are going to respond. What an arrogant prick.
Fighting imaginary foes means she always wins, but since she ignores arguments, fact and logic, she always "wins" anyway.
Her comments in the Taibbi post - Oh gawd, I'm going to be busting out in giggles all weekend!
Remember, Downpuppy, that McArdle is required to get her facts right.
And that people shouldn't talk about finances if they don't really understand it. Also:
"The more dangerous thing is that Taibbi makes a lot of people feel like they finally understand how they were conned. Taibbi's facile use of technical terms, his lengthy explanation of little-known secrets that have been endlessly rehashed on every financial page for going on a decade, gives people the illusion that they have acquired valuable information about the financial crisis. They haven't. They've acquired a bunch of disconnected vignettes."
The irony is mind-bending.
What about when she wrote "He seems to deliberately eschew understanding his subjects..."
What are the words I'm looking for here? Takes one to know one? Pot, meet kettle?
Looks like discretion (or lawyers) had a word in her ear.
Megan McArdle (Replying to: Downpuppy) July 10, 2009 6:52 PM
No, his facts are wrong, his conclusions are wrong, and only his discomfort with Goldman Sachs' role in our public life is correct. Since that's about 5% of the essay, and he doesn't even explore THAT in any interesteing way, F-
Megan McArdle (Replying to: Megan McArdle) July 10, 2009 9:48 PM
Or perhaps a better way to say it is that the facts are right, but the mini narratives are ludicrously wrong, which makes the meta narrative suspect.
I am not willing to read McArdle's entire post about Taibbi, but the comment threat over there is a gem.
Megan's potshots at people usually result in multiple posts over the course of a few days (think Krugman, Greenwald, Klein and Warren), so I expect she will spend some time this weekend reading old Taibbi articles looking for a 'gotcha' or two.
"FICA is regressive in incidence,"
And reality. Of the two people in her example, the one making $20,000 pays 6.2% of her salary (matched by the company) for FICA.
The $200,000 person, otoh, pays about 3.1% of her salary for FICA (also matched by the company).
So if you put a surtax on those making more than $200K, you can put a 3% tax on that income and SocSec is still regressive when combined with it.
Someone needs to remind McMegan that she's only supposed to talk about "income" taxes.
Thanks for the Domhoff link - I'm always looking for more good work on wealth inequity.
Hmm, so is McCardle trying to lay the groundwork to say that corporate taxes are bad and should be eliminated? I don't think even she can follow her own arguments, only her predetermined plutocrat conclusions, so I'm not sure.
Post a Comment